Robmagmay2019.Pdf

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Finally, an SUV that’s been designed to move you. It took a logistical miracle to install this 96-metre-long splitter, which turns propane culled from oil sands extraction into plastic Y FINLA THLEEN KA M) TO OT

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MAY 2019 / REPORT ON BUSINESS 3 May 2019, Volume 35, No.9 Feedback Editorial Editor, Report on Business DEREK DECLOET Lait man’s terms Assistant Editor DAWN CALLEJA Jason Kirby profiled dairy scion Lino Saputo Jr., Senior Editor JOHN DALY who is defying the curse of the third generation Copy Editor LISA FIELDING, MICHAEL BARCLAY with a successful global expansion Research CATHERINE DOWLING Art Art Director DOMENIC MACRI proposing a penalty as opposed to Associate Art Director criminal prosecution. Either way, Send us your BRENNAN HIGGINBOTHAM thoughts at Director of Photography - The milk cartel has to go, SNC is penalized. —Sweet Red Dog robmagletters@ CLARE VANDER MEERSCH regardless of Saputo’s strong globeandmail.com, tweet us @ Contributors leadership. Canadian consumers - Even if SNC’s engineers were robmagca and STEVE BREARTON, TREVOR COLE, follow us on have been gouged for decades, so hired elsewhere, they might no Instagram @ TIM KILADZE, IAN MCGUGAN, the awakening is near. The only longer be working for Canadian rob_magazine JOANNA PACHNER, ERIC REGULY, way we can change the current companies. And driving SNC RITA TRICHUR, LUIS MORA monopoly is to completely out of Canada would mean these Advertising boycott Canadian dairy. projects would go to foreign Chief Revenue Officer, VP Advertising ANDREW SAUNDERS —Unlimited reader companies. Why damage a major Managing Director, Creative Studios Canadian multinational that, and Ad Innovation - The article omits the largest by all accounts, has straightened TRACY DAY Canadian purchase made by the ship? —res ipsa loquitor Senior Manager, Special Products Saputo. In [2000], it bought ANDREA D’ANDRADE Dairyworld, headquartered near Bay Street so white Product Manager RYAN HYSTEAD Vancouver. In typical Saputo Hadiya Roderique’s Rant made the Production fashion, the poorly managed case for anonymized resumés. Managing Director, Print Production co-operative was going bankrupt, SALLY PIRRI and Saputo picked it up for 40 - Let’s wait to see how many Production Co-ordinator cents on the dollar and turned Canadian CEOs go to HR and say: ISABELLE CABRAL it around. —loba1204 “Do not look at names—get me Publisher PHILLIP CRAWLEY Editor-in-Chief, The Globe and Mail DAVID WALMSLEY Managing Director, Business and Financial Products Shouldn’t Saputo be called GARTH THOMAS Report on Business magazine is published “le Grand Fromage” rather than 10 times a year by The Globe and Mail Inc., 351 King Street E., Toronto “the Big Cheese”? M5A 0N1. Telephone 416-585-5000. Letters to the Editor: Opportunity missed in the [email protected]. The next issue will be on May 31. Copyright 2019, The Globe and Mail. headline department Indexed in the Canadian Periodical Index. Advertising Offices Head Office, The Globe and Mail, 351 King Street E., Toronto M5A 0N1 To save or not to save the best person!” I hope I live Telephone 416-585-5111 or toll-free Paul Tellier urged the feds to step in a long time, because it may take 1-866-999-9237 Branch Offices to keep SNC-Lavalin in Canada. a while. —Maisie Vanriel Montreal 514-982-3050 Vancouver 604-685-0308 - No one came to the rescue of Standing tall Calgary 403-245-4987 Email: [email protected] BlackBerry or Nortel, or the long The tale of a small engineering firm United States and countries outside of list of other Canadian global helping to build supertall towers North America: AJR Media Group, 212-426-5932, firms that went upside down. ignited some Canadian pride. [email protected] Yet all those fine employees Publications mail registration No. 7418. survived. The only person soon Take note, SNC-Lavalin. Looks The publisher accepts no responsibility for unsolicited manuscripts, transparencies or other to be unemployable will be Justin like you’re not the only Canucks material. Printed in Canada by Transcontinental Trudeau. —Ceejaybee who can compete on the world Printing Inc. Prepress by DM Digital+1. Report on Business magazine is electronically available stage. Perhaps a few of those 9,000 through subscription to Factiva.com from Factiva, - The Liberals are not defending jobs could end up in Guelph... at factiva.com/factiva or 416-306-2003. criminal behaviour—they are —WhistlingIntheDark tgam.ca/r

4 MAY 2019 / REPORT ON BUSINESS ILLUSTRATIONS SAM ISLAND this month Indig co on societ bu gr the Yo Is Th ams ming u ye it it re to might —w e rs enous fa ce y fo one pa , ou ir nt election small ith r fo y t near budg ha slic ther a a peop r ve single adult whopping ly e busines e, et hear of is, le ev yo ma , Ca ery tr s unf and u d Million-dollar de agicall to can na ther s ortuna identifiab tha on dian ow st bet $7 e’ ick t and ner s y, pl 36 ther a demog te the ain the fe s, on. ex ,0 le der e’ rur enough, ve ce 00 s ne demog If al ry a ra ption. al ther pr xt election ph mor gr fo e-election gener y oup lk, e’ ra with ce s e phic: middle-ag a rt in with re ain go co at ta co Th ming odies senior ion xe per the to gniz e s be k Ra with gr than soon. ab and ed with s, ignor ea nt le yo job te special a segment ung their the Of st he ed hunt st co home- y ft ak in name ur will y pr e er the se ta o- of in s, , baby x re bill? ce dr vo bill mist no the or its not iv ooler te w— ou ev To e fo siz be ak —bu in tco en r da MA es e and ev s ab individual me: and speak Y y’ will ery and t le 20 s these the 19 ne ne to shape one one indulg / wborns. REPOR y or wborns fe of ce da ed ad ro bene of y our rt T enc or ll themsel ON be ainl this ove ab Th co es. BUSINE handed ar le fit y llecti ey r fu e Gi s can lit right se tur ma ve SS ve tle ve t s, ’t n y e 5 a “The internal combustion engine is all but obsolete, really, 30 MINUTES for future development. It’s all about electric.” —Greg McDougall, Estimated range of current CEO of Vancouver-based seaplane airline Harbour Air, which is adding electric aircraft right now, a fully electric plane to its fleet of 42 aircraft, a world first with a half-hour reserve

GENERATION REAL LIFETIME NET TAXES FOR CURRENT working folk who are available to CLEANS UP GENERATIONS BY YEAR OF BIRTH ($000s) pay taxes, while increasing the Canadians born in 800 amount of health care and elderly the 1970s are set benefits owing, combined with to face a relatively the accumulation of past govern- low net tax burden 600 ment debt. Mahboubi’s results over their lifetimes, also reveal some striking gender while the totals disparities. A male newborn can for newborns are 400 expect to pay $1.5 million in net on track to soar taxes over his lifetime, whereas a female newborn will contrib- 200 ute a mere $82,000. The reason? Women work and earn less, meaning they pay fewer taxes. Plus, 100 they tend to live longer, and are more likely to receive child bene- 10 70 30 20 40

19 fit and social assistance payments. 19 19 1950 1990 1960 1980 20 19 2000 Generational accounting was first applied to Canada in the mid- burden, we ought to consider their 1990s, during an era of uncon- absence from electoral debate These adorable trolled government spending and to be a national, intergenerational little droolers will rapidly rising public debt. Econo- embarrassment. mists Philip Oreopoulos, then Recently, the C.D. Howe Institute one day be handed an analyst at the Montreal-based used an economic technique called a bill for every one Institute for Research on Pub- lifetime generational accounting to of our collective lic Policy and now a University assess the fairness of Canada’s fis- mistakes and of Toronto professor, and Bos- cal policies. While the math is com- ton University’s Laurence Kot- plicated, generational accounting induglences, and we likoff used similar calculations is easier to understand if you imag- ought to consider to demonstrate that “current fis- ine a Vegas-style gamble based on that a national cal policy is unsustainable and is your birth year. Every generation placing a higher net tax bur- pays taxes and gets government- embarrassment den on future generations” provided benefits in return. The of Canadians. Their pro- cost of broadly shared programs, jejectionsctions susuggggesestteedd future such as defence or the bureaucracy, tax rates would have to double to is generally split equally across all bring fiscal policy back into bal- generations. But the size and scope of individually focused benefits— ance. This outcome was avoided health care, education, welfare and public pensions, along with the by former finance minister Paul taxes meant to pay for them—can vary greatly over time, depending Martin’s famously austere 1995 on politics and demographics. Winning this game means receiving federal budget, which dramati- a lavish supply of benefits while being subject to a relatively small net tax cally altered the path of federal buburrdden.en. Losing means getting stuck paying for a huge party people finances. That said, our commit- born in other years attended. ment to intertemporal fairness Let’s start with Canada’s most dominant generation. Baby boomers, appears to be slipping somewhat, according to C.D. Howe Institute figures, can expect to pay, on a net basis, as evidenced by the current Lib- around $200,000 per person over their lifetimes for all the health care, eral government’s ongoing affec- education and other social services they receive. (All figures adjusted to tion for large deficits. birth-year values.) That might seem like a lot, but it’s nothing compared Looking even further into the to the current generation of newborns: Over their lives, they’ll each pay future, generational accounting an estimated $736,000 more in taxes than they will receive in individual also allows for us to calculate the benefits. The luckiest Canadians are those born in the 1970s. On average, tax burden on those Canadians not these kids of boomer parents face a net tax burden of just $27,000 each yet born—a crucial test of interfor their lifetime of social benefits. “Generally speaking, boomers and generational fairness. According their children fare well in this scenario,” says Parisa Mahboubi, a C.D. to Mahboubi, unborn genera- CHAN

Howe senior policy analyst. “But their grandkids do not.” Now you know tions of Canadians face lifetime ALAN

why babies cry. net taxes of $633,000, somewhat APH

This huge discrepancy between newborns and older generations less than our current newborn’s GR TO is the result of an aging population, which reduces the proportion of tax bill of $736,000. This, she PHO

6 MAY 2019 / REPORT ON BUSINESS Up in smoke In March, Quebec’s appeals court upheld a 2015 decision awarding damages to 100,000 smokers that could total $17 billion. The move prompted the Canadian divisions of British American Tobacco and Japan Tobacco to suggests, is reason for optimism. seek creditor protection (Philip Morris, meanwhile, cut its profit outlook). And yet her optimism is heavily But that eye-popping figure pales when compared to how much the provinces reliant on two key assumptions are hoping to recoup for smoking-related health care costs. /Steve Brearton about future government policy. In particular, these results require keeping a tight lid on health care = indicates high range spending and maintaining our current high levels of immigra- TOTAL DAMAGES SOUGHT BY FIVE PROVINCES tion. Immigration is crucial to $361–$841 BILLION restocking the workforce, while health care spending restraint is Ontario, Quebec, B.C., Alberta and New necessary for limiting potentially Brunswick are suing Canadian tobacco explosive costs associated with companies to recoup health care costs an aging population. Both are (the remaining provinces and territories have yet to quantify damages). hot-button issues that generate Here’s the breakdown plenty of political debate. If either succumbs to public pressure in October, the outlook for upcom- B.C. $118 BILLION ing generations will suddenly get QUEBEC much grimmer. $60 BILLION There is, however, one more policy adult Canadians can choose in order to lessen the burden on our youngest and most fis- ONTARIO cally vulnerable citizens: raise the $280–$680 retirement age. BILLION Increasing the retirement age from 65 to at least 67 would loosen 21,100 Canada’s demographic squeeze by Canadian deaths due extracting more taxes from cur- to lung cancer in 2017 rent workers and slowing the rise NEW BRUNSWICK of new retirees. Recall that in 2012 ALBERTA $11–$23 BILLION former prime minister Stephen $10 BILLION Harper planned to push the age of 26% of all cancer deaths eligibility for Old Age Security to Ongoing class-action cases being brought against 67 (as most other developed coun- 10 tobacco firms in Canadian courts (as of December 2018) tries are now doing), only to have 28,600 Justin Trudeau undo it in an effort New cases of lung cancer Individual tobacco liability cases before to pander to senior voters. And in 2017 3,744 American courts (as of December 2018) when you consider that Canadi- ans are living, on average, nearly a decade longer than they did in the CANADIAN SMOKING $357 BILLION RATE, AGES 15+ 1960s, when 65 was arbitrarily cho- Amount the tobacco sen as the standard retirement age, manufacturers were ordered working a few extra years doesn’t 49.5% to pay in a 1998 settlement seem like a very big request. 44.5% with all 50 U.S. states to “Canadians who have paid the recoup tobacco-related health care costs lowest taxes could be asked to stay in the workforce longer to reduce 34% $22 billion ESTIMATED LAWYERS’ FEES the burden on future generations,” 26% says Mahboubi. Such a plan also seems entirely fair, since those 19% 80% CIGARETTE VS. VAPING MARKET GROWTH being asked to work a little bit 13% longer are the same folks who’ve 60 massively benefited from the cur- 40 rent inequities of the system. And 20 Vaping really, is anyone so heartless that Cigarettes 5 5 5 15 they’d force a baby to pay for their 75 0 19 199 196 1985 20 golden years? /Peter Shawn Taylor 200 2010 2017

MAY 2019 / REPORT ON BUSINESS 7

PHOTOGRAPH KRISTINA DITTMAR Lu the ndin to p Ro Mining job and CE lling ho O w Marie she hope Inks by Th s te in to e Tr r Ex opens evor change change the Cole up the about indus her deep try’ re s luct ba d anc re put e to at ta ion ke spok sa to ho Based as meeting Inkst And an co pr the Pa appr Inkst When in I ad Onc Co wa Inkst What to wo join a fo wa she a int the of wa jungle. 20 Co Chile co rights incr import mid-tier dif near of as in Inkst with kne suc rising fic und t edec ve mp mp 14 ul building To lead wh my w his CEO ficult o nt s lking mpu pper in uld in Ca audacious wa easingl e tr her e ly a ov ntur e fo we ve ac and w ce her er er er er ro , to at an an bo a made suc av of lif ta co to ra her ndelaria on MA MA her s r ha doub es ant Lu al , quisition stment ss wh She . nt CA te ’s . smartl we re mid-tier co y. y. king someone Mining e at we s, CF elling Th ar thr mar ising LionOr Inst ntr miner Y Y in in e sor I ve . fir r o’ ce no the ndin pl self in Pe In I Pa 20 20 at d nsider to bos least nt vo in Co ve s y with re O at the Lu ough or ha st. ss you ac ove ling w to meeting 19 19 mining. ke ge op ea financial Oct ul it wa challeng ove ic busines st to car at pu chestr or rp go $2 in d ed s ndin y / / Ca When Lu the ge Mining? in to ts ther d, e or le str ha mine REPOR REPOR and rs lef s . a wo the tw Lu decided . e, Co .2 ing ts Deloit the the ober eer r, in of miner ok t in Pa the and na ka go in s an ac ies. ve kne d looking at being t my wo in billion o ndin her to ’s mp rk an the identified the s fo ul da’ right to co ything, ing mak 20 egy ry to to at siz thr ye of T T , s Soon ne ge Co int Lu s we w We human rl fo ed r fo of ld ON ON st district. ed Co unting. to industry 02 le mak might big do in s ar te Marie No e d. Ca ther w ee-per la run to tha r r ndin, amp ernal Mining, ng of es to x ge last the lur by BUSINE BUSINE not bought of , s nibear Lu ex char Geac te choice sa Ca By of and it. she in ndelaria appr fo rt p pa prior olese she ther the her e t the ed t . he amp by 19 fic ndin el, na bo if r We We ye it to do 20 of rt and 90s. ge son me my es SS SS da, ar . an ar ove 09 wn le ’s d , 9 9 , How involved was Lukas Lundin for making brash, risky moves. in the decision? As CEO, how do you assess risk? The board was very supportive. In our business, there is always To be honest, the first time Paul going to be risk. It’s a matter of and Lukas talked to me about what’s an acceptable risk. We taking over the company, early don’t want to bet the company in 2018, I actually told them it on any one single asset. So when wasn’t the right time. I have two we look at a big investment, we daughters. One of them was in look at something that would Grade 7, the other one in Grade 11. have relatively lower political and They were coming up to big years. technological risk. For smaller I’ve always had this guilt. When I investments, if you see large was working with LionOre, I used reward, you maybe take a little to travel for long periods of time. bigger risk. Since I’ve been here, One time, my elder daughter was we’ve taken great steps to de-risk. four years old. I had been away for When I joined in 2008, half of our about 10 days, and I called home. value was in Congo. My husband said, “Danielle, do Why that shift? want to talk to Mommy?” And Around 2010, the government I could hear her yelling in the of Congo announced it was background, “No! She’s not my reviewing every mining contract mommy anymore!” I think that in the country. Lots of unpleasant stuck with me. So in January 2018, things happened with foreign the timing wasn’t right. In May, investment in Congo at that Lukas and I talked about it again, time. We saw companies’ assets and I said the timing still wasn’t get expropriated. Others had 2. After suc- Absolutely, we do. We actually right. It was my daughters who contracts resolved with very bad cessive bids, updated it last year, and did Lundin’s offer told me I was being stupid. They economics. We were lucky to for Nevsun training for all the senior had a mini intervention with my have a good partner in Freeport- stood at executives and sites. We had to husband. They said, “We don’t McMoRan, which stayed resolute, $4.75 a issue a press release a couple share in July want to be the reason you pass but it could have turned out 2018. When of weeks ago in relation to a up a great opportunity. We want very badly for us. So we thought, China’s Zijin story that Bloomberg picked Mining of- you to do it.” (1) Do we really want to have that fered $6 per up from a Spanish publication. The month before you took over, much of our value in a high-risk share, Lundin One politician accused another Lundin abandoned its long effort jurisdiction? Probably not. walked away. of bribery in relation to an to acquire Nevsun. Was there a The SNC-Lavalin situation 3. The environmental impact study reason you didn’t want that to makes me wonder to what degree bribery ac- (3) we’d submitted. There were happen on your watch? companies that work in risky cusations, no allegations against us, but which did not No, it wasn’t that at all. The regions are prepared for anything. involve Lun- the headline linked accusations announcement that I was taking Do you have a code of conduct in din officials, of bribery with the mine. And over was in July. The transaction place regarding things like bribery involved an Bloomberg ran with it. Their apparent was still in play; the Chinese and corruption? attempt by headline was: “Lundin Chile hadn’t yet made a bid. (2) There’s local lawyers Unit Named in Alleged Bribe no good time to announce a to divert Investigation.” Our stock took some of the transition when you’re in the ONE IN 20 CEOS money a huge hit. We issued a news middle of a transaction. If the OF GLOBAL MINERS ARE WOMEN Lundin had release to say clearly we were transaction had failed, everyone (according to a study from Bloomberg) committed not the subject of any bribery to the town would have said, “Paul Conibear of Tierra investigation. So we are very is getting the blame.” If the Amarilla careful to make sure people know transaction had succeeded, (including what is expected of them. And A COUPLE HERE IN CANADA... $16.5 million everyone would have said, “Paul promised when we are dealing with foreign didn’t like the transaction so he for social officials and mayors, we don’t take programs left.” We consulted with a PR and infra- political sides. In the community firm, and they said, “Do you want structure) next to our mine, Tierra Amarilla, to wait until it’s over?” We said by charging we invest in the community to exorbitant either way people will put a spin legal fees. help improve the infrastructure, on it, so let’s just do what’s right Candace Eira Thomas provide essential services, help for the business. MacGibbon Lucara with health care and education. The Lundin family has been known INV Metals Inc. Diamond Corp. Six months prior to the municipal

10 MAY 2019 / REPORT ON BUSINESS election, we stopped all spending CAPITAL RAISED BY RELATED COMPANIES on the programs. We didn’t want CANNABIS CRYPTO any politician to say, “Look what I got from the mine.” You’ve stepped into the leadership of Lundin at a time of change in the industry. Do you think $4 BILLION Canadian mining companies are doing enough to protect the $2.9 BILLION interests of the communities and $9.8 BILLION populations where they operate? I do. But we are not good at 2017 2018 promoting the good work we do in foreign jurisdictions. That’s $900 MILLION why, often, only the bad stories rise to the top. I would be very surprised if people intentionally went out to do bad things. for a long time. Were you aware 4. The I think we need to reinvigorate Although I’m not naïve enough that Nevsun had been accused of researcher ourselves. When people only found 709 to think that never happens. using slave labour in Eritrea? (5) cases of hear the bad stories—the dam There are a lot of rules and best It was known and discussed at the criminaliza- collapses and lawsuits and human practices established by the board table quite extensively—the tion involv- rights issues—it doesn’t inspire ing Canadian Mining Association of Canada history and the risk, and what miners in new generations to come to this that you have to follow to be we planned to do with that asset Latin Amer- industry to help us. We need that. a member. if we were successful. And the ica between How will Lundin Mining under 2000 and A study by an Osgoode Hall potential for more people to come 2015. Marie Inkster be different from researcher concluded that and make those kinds of claims. previous versions? “one of the biggest threats (4) But that issue in and of itself 5. A lawsuit I don’t think it’ll be drastically first filed in to Indigenous people in Latin wasn’t enough to push you away? 2014 against different. I think we’ve built America comes from Canadian It was very concerning. But I Vancouver- a really good company here. based Nev- mining companies.” I’m trying to think we said in the grand scheme sun accused There’s a great culture. We’ve measure that against what you’re of this transaction, this asset is a local sub- done a good job in being stewards saying—that Canadian mining actually quite small. And there’s a contractor of of investment. We’ve kept the forcing three companies are doing enough. legal claim here, but it’s probably Eritreans to company financially healthy I guess I would ask, who else something that’s resolvable. work under through two downturns. I think is there? I think we are an easy So were you looking at it as a cruel condi- our long-term investors trust us, tions against target in our industry because financial equation? their will. and they like the direction the we are in places where other No, there are reputation issues company has been going. I think industries aren’t. that are far more damaging than they would like to see a little bit But you’re also doing risky financial. When we go to a new more growth. I think they’d like things, right? community, the first impression to see us deploy our capital. Yeah. And that’s part of our you make can often dictate So you’ve been on the hunt for business. I think mining is an whether you’re going to be more copper mines. easy target. People are very successful there and whether the Absolutely. We have been anti-mining—“mining is evil, and community will accept you. You searching for the next Lundin mining should stop, and we are want people to say, “Lundin—they mine for a while now. destroyers of the environment.” came in, they respected us, they We are ready when the right That’s the narrative. But what’s listened to us, and we want them opportunity presents itself. the solution? That we stop to be here. We trust them.” Do you expect to make a big mining? Name something you What’s the mood in your industry announcement in 2019? can do without mining. That’s these days? I hope to make a big where I come back to saying we Certain tier leaders are feeling announcement in 2019. That’s don’t do a good job in the industry good, but there’s a definite lack our objective. of promoting ourselves as good of investment in the junior space. corporate citizens, and the That’s risk capital, and the risk Trevor Cole is the award- positive things that can come capital is going other places winning author of five books, including The Whisky King, with mining investment. at the moment—blockchain, a non-fiction account of I wanted to come back to Nevsun, cannabis. (6) A lot of investors Canada’s most infamous which you were trying to acquire have lost faith in the industry. mobster bootlegger.

MAY 2019 / REPORT ON BUSINESS 11 Panorama Splitting distance

After several grim years, Alberta’s oil and gas industry needed a shot in the arm—especially one that points Inter Pipeline’s Heartland to a high-tech and greener future. Petrochemical Residents in Edmonton and east of Complex the city got an almost sci-fi glimpse will take in of things to come over four days in 1,700 January, as an 820-tonne steel tower TONNES as long as a CFL football field and 9.5 of propane a metres wide, laid sideways on wheels, day and crept along highways at a maximum transform it into speed of 15 kilometres an hour. 1,400 The vessel is a propylene-propane TONNES splitter, and it will be part of Calgary- of polypropylene based Inter Pipeline Ltd.’s $3.5-billion plastic, Heartland Petrochemical complex, enough to fill northeast of Edmonton, which is 16 scheduled to open in 2021. The plant RAILCARS will take propane culled from oil- sands extraction and transform it into pellets of recyclable polypropylene plastic. Uses for that plastic include food containers, medical equipment and portions of Canadian paper currency. Technically, the splitter will extract propylene gas from propane, and that gas will then be SPLITTER converted to plastic. 96 METRES It took a year to assemble the splitter at Edmonton’s Dacro STATUE OF Industries Inc. and two years to plan LIBERTY the move to the Heartland complex 93 METRES along a circuitous route around Elk Island National Park. The splitter also addresses an old complaint: Alberta’s petroleum industry is not capturing enough of the value added after extraction. At

present, the province ships low- ON value propane to the United States by pipeline, and Canada re-imports NICHOLS

about $1-billion a year worth of AN polypropylene plastic. When the EW

splitter arrived, Alberta Premier APH

Rachel Notley beamed. “We’re just GR cooking with gas up here in northern TO Alberta,” she said. /John Daly PHO

MAY 2019 / REPORT ON BUSINESS 13 more residential construction in major cities. But new homes can’t be built overnight, so demand could eclipse supply for a long time to come—meaning the pro- Rita Trichur gram could actually drive up home prices in the interim by widening this gap. Most concerning, however, is that the Too EZ for comfort CMHC is assuming more risk for partisan gain. In the aftermath of the financial cri- The federal Liberals’ new cash-back mortgage plan for sis, the federal agency spent years reduc- first-time homebuyers is risky any way you look at it ing taxpayer risks by deliberately decreas- ing its exposure to the housing market. As part of those initiatives, it stopped provid- re you a first-time homebuyer ing mortgage insurance for second homes who is feeling priced out The incentive is and those worth more than $1 million. The of the market? Don’t worry clearly aimed at agency also ceased coverage for some self- about saving more money— employed homeowners who lack third- go see Cammy the Mortgage millennials who party documentation of their incomes. Closer instead. You prob- can’t afford homes In effect, the new plan targets risky bor- ably know the agency, officially known as in the country’s rowers. Although the purchase price of the Canada Mortgage and Housing Corp. largest cities. the home will be capped at four times a (CMHC), as the federal mortgage insurer. borrower’s annual household income, the But starting in September, it will also offer The Trudeau program is available only to first-time buy- home loans to help property newbies just government wants ers who have household incomes under like you. to curry favour $120,000 a year. Since a down payment Here’s how it will work: Under the is just one of the slew of costs associated CMHC First-Time Home Buyer Incentive with this sizable with owning a home, it’s easy to see how announced by Finance Minister Bill Mor- voting bloc cash-strapped borrowers could get in over neau in his March budget, the agency will their heads in housing markets like Van- share the cost of buying your first home couver or Toronto. in exchange for an ownership stake. After Other jurisdictions, including Australia you front the minimum down payment, and the United Kingdom, have experi- the CMHC will spot you cash worth up TIME NEEDED TO SAVE mented with these shared-equity mort- to 10% of the purchase price of your new FOR A DOWN PAYMENT gages. They’ve found drawbacks that digs. Yo u’ll get an insured mortgage with FOR A TYPICAL COUPLE SAVING 20% OF Canadians ought to keep in mind. For lower monthly payments, and all that top- INCOME FOR AN AVERAGE-PRICED HOME one, the resale process for homes that are up cash is interest-free. Cammy doesn’t VANCOUVER jointly owned is more complicated. Loan have to be repaid for its equity stake until covenants restrict certain types of trans- you sell your home. TORONTO actions, which has resulted in a “limited If this offer sounds too good to be true, MONTREAL resale market for shared-ownership prop- that’s because it is. This is a subprime = 1 YEAR erties,” according to a 2014 report by UK lending plan that ought to raise red flags CALGARY Finance, a lobby group for British banks with taxpayers, who backstop the CMHC. WINNIPEG and other lenders. The incentive is clearly aimed at millen- Homeowners could also find it very nials who can’t afford homes in the coun- costly to buy out their lender’s portion of the equity down the road. “Depend- try’s largest cities. The Trudeau governing on future changes in house prices, repayment of the equity stake could be a ment, which cooked up the program with relatively expensive option,” the report says. a federal election looming this fall, wants Besides, the last thing Canada needs is more alternative lending programs for to curry favour with this sizable voting illiquid consumers. Canadian households are already shouldering $2.2 trillion bloc. As a result, CMHC will dole out $1.25 in debt, and the lion’s share—some $1.4 trillion—is in mortgage loans. billion over three years—an inducement Instead of encouraging more risky borrowing, Ottawa should be helping con- that will most certainly fuel higher home sumers save money to build more equity in their homes. It can start by cutting prices in major markets and stoke risks in personal income taxes to boost take-home pay. Provinces and cities, meanwhile, the financial system. need to alter land-use and zoning rules to increase housing supply. Part of the problem is that the CMHC Making the CMHC the country’s newest loan arranger for financially chal- MORA will give the biggest incentives to buyers lenged millennials is not the solution. LUIS who purchase new homes—up to 10% for new builds, but just 5% for existing ones. Rita Trichur is the financial services editor with The Globe and Mail. You can reach her at The government says that will encourage [email protected] or on Twitter @RitaTrichur PHOTOGRAPH

14 MAY 2019 / REPORT ON BUSINESS PHOTOGRAPH LUIS MORA Ot ge Que Bo as te La dispens can eag ta Ne te and ist tr appear nec fo their of and alibis ther Albert boundaries Mo up Ne ba during and gles wick their ay lism d m Much Bu He Th Go r va st the ta ilou mb wf ar independenc flo to unt ernes es busines bribery fa bec, ne the pr e wa is the themsel lin, e ly t co re ve chosen oundland mis sa sports rmer inspection. wing bigg wa tha ar trul re Ca ov at ve ain t s a. as ’s the rpor rnments y’v at ry has of so hist dier of wh sult to and s incial all. r s ad the t, na ions Ad ba y pa est e pipeline to Ca quit the deep s, ta financial Ont fo ich ses and ve an pour d helped at ory da’ dispr Gimme ve It or , is d fo rt bur it’ car kis ge neering tha le shouldn rime thing, na l r is of the ntur e ’s fr all-p up s r a in deci e s If of ve the go is s doesn ario-c pa nc the gr ly fe da fr re om e—think s abou st ma as of s mes eas eaucr t ed ge ha Ot eag l their aud alleg ve and nder Labr happen eenhouses, art av Bu co rt ho cipients and e, oportiona es. per of Minist stur go t most art Tr to cr sion ve y endles go y ta ybe rnments though bu nfused ia s itself crisis. er t w ernes t int ea to ve ’t ’t udeau giant in Last lines. ge of y, entric mak ce at ve wh wa handing tion ed s learned Pr s. ad t jobs. dy be st te much ar rnment all-C s see er Lib his t iv swe rnment. to In the pa airie small o to or op ha er oil to e ic isn es est e s and of so ye s Mo re ar objects bu co rt, gi ya fo : on ons ef wh ve subsidies up ha Co go Ju et be f hy y’ these at ana flo It to ’t justify ar te ve alit au e lks ob fo in Ne . mp the y don stin ve d ’s the re upg ve deals re abou y— the ou , busines dr lit nsider the so loca with pr ly wing Ia rts of to the cu boondog of viousl Jo the dian find y, w eas ga wh rnment’ re an co tle o t ov gr n mak is f to br the ’t capit hn the fa t ? ra y Tr special to rd Bruns- ce te a pr dams, t mmit y sue. o Tr ound. fa Mc Man y these incial deals vo st fo SNC wa az wa der fr capi- fr epic. ed nast udeau d it ntl help Les- por- tha int te ov sys , big to and r ans y the er om om ur ses en. in Gugan al- rd ea this st Fo doing eag s, y, of o y inc under s s s - - - - - t y politicall gimme arr e sier r the SNC st er ye industry can on es ench. ang Ian imc cr inf the ernment pose subsidiz efits. mor demonstr rig ar leg fa to st to we busine -La Th A edits ne an Co wh ad en It dis pr th th s, vo sa orma or ements gugan@globe and McGugan rush all Pa to e jus Ca ’s y y ur e ous re va Po Ju and olif at es w di jo willing ke d y ugh-minded rl sensiti ev his pensin il na or s no lin st t and wh challeng liticians fo iament tion y ed se e ct fo to en e com sa anal va . busines da’ ss as wh tha at go rc er wa In r pr y th with poli ed and the ct bet e y my deductions, is busines import s ed ri sub ve Ot on ether t ve at an ys to s no an elect du og andmail. e or sect te et ary rnment’ es or to aid ta is. by st jurisdictions. e to all ec aw flims st po ed g and ti r sidie s s ra dinary wa st and ie option lik And or onomic ent ar ho ed Budg fr ery tr it’ go ci subsidies appr of ant, becom Que s we d- s ms ri . co s bur of w y om Th lobbies ans ea lea winning erprises. up busines e s, odi of actuall es m right ec ficial s much. it oa bec r et e as wh eaucr der due ts or unusual to wo onomic co fe ch pa Of on es, we lobb uld der engi- s uld dom no Globe yo e y dili- wo thr fic and Tw as y ses ll at w, Th achie al ff e help it be yists a s as uld ough te or or and we is r an inc @IanMcGugan dir undeniab pr wo impr ving Mail if co and dies, alr tr lif tries tha pr go pl on miner machinery fo seem on much fa busines no st Th fo gr cal nes co dies tha te subsidizing fo of anc manc questionab of ma need independent all enti ov ect ansp the or y r, vo Isn It Th Th It ow er ur r r uld og mpr nsist odies, Ca the ea ey flo t te ra t ses, ta ’s incial ye e. writ channels—pr manag shooting subsidizing an es ma at ove inc co tha ur ve pride ra e is fa y funds ’t dy bu ing lar tionale d politicians lg no e, x w- to and can allo Th ar al e endles ehensi list kne bigg ar ther er mes iled and ms. ex doesn s s ed y ary’ omp the co inc t he ses t lik . ge le be . thr politics. pub my ex and co wh is, ency these not e Re Ju go ecu w audit urt of spur of w ement e social st estima lar sect pl e enti mp s est . ach joining le to themsel ough Fi tha st dry fr to st al. fe ile let as ta ne lish Eve a busines $7 an School or shock other lo es ti s. pr ’t om fo ve ery lmmak as spending ar ge MA der under in bet xp impr anies him t ve e. Pr wo w beneficiaries politicians fig mak ans or y yo at y r Fa billion ov ve or gr ses cleaner eas int annual st Y n aye with Ca aid some benefit Th cu Elect of shar dispensing yo og ion. va te wh s, og and al ur te 20 fe rmer ow u uld s at s inc media subsid end sment, the deli sect r e of tt d, lo rieties tha ove 19 yo ra ung, llo na ve es ra e might fo bec rs with go y wo ses wa of er half th. sense. ing es we es ne / ms Manuf go spines. m wh each these u help ed r da. s w te to or REPOR subsid t s ve ve s number to or Pu re y? uld wa s. to ome ec in ha on and xt Ho ve in should nd r spent spending, benefit enjo at inno a ile see of glob so tha re port rnment s of y re co Lest Th ta per bl Miner ve enjo onomic ve s learn st rnment of . deal tha the ex ficials be pr we d the pr the to Th main T x close pr fo Go ic the mp ove ta ep actur t tr sting ese wh we ON ta y haps thr y Co ra og ad al pect, og va can r er be subject og tha x t ea ve Po er y ir 20 pa $2 ve ngib ta s wo Un small te ge anies be ambitions. fo BUSINE cr amount ra ra o’ re the dict ke fr ough ra ti tha sa ts. ra e r, s ar on sca licy x sel small. t ra s. 9 14 ’t rnments might to s er r ve, t edits om m’ ll and is thr m depend uld pruned. ys co iv . ther ms lending sect and e per in cr special ge billion clear de. co –1 le t pr Indus- s po subsi- subsi- 60%. f- tte a er s ed , small llects some of mor edits busi- ough ed SS fe 5 tt fa ben- no esti- ne sup- re rner case go pur- pr et be we fo sit e the re or ing fis- ta fo ast st all be li- to 15 ty o- to of v- ly w w r- is d y x e a s r r - SPONSOR CONTENT Opportunity and CANADIAN COMPANIES AND knows of more than 400 Canadian INVESTORS are betting big on companies that are invested in the United Kingdom’s future and innovation drives the U.K.. He and his firm have full its longevity as a global business confidence in the U.K. as a place destination of choice. Canadian investment for investments, especially over the Regardless of how the U.K.’s long term. relationship with the European “The trick in business is to buy Union develops, Canadian busi- in the U.K. low and sell high. Current short- ness leaders say the Canada-U.K. term uncertainty is going to create relationship will continue to grow opportunities,” he said. “We’re and prosper. They point to factors seeing clients taking a look at [the such as the U.K.’s highly skilled U.K.], and they’re bargain hunting.” workforce, low business costs He’s also confident that London and access to capital that will will remain an irreplaceable pre- continue to make it a global hub for mier business destination, pointing commerce and investment. This to the economics of agglomera- year, the U.K. also secured the top tion, where people and companies spot for the second year running come together in large groups. In in Forbes The Best Countries For a global city like London, as many Business list. firms in related sectors cluster The ties between Canada and together, their production costs the U.K. run deep and the U.K. can decline significantly thanks to has long been one of Canada’s economies of scale and competi- largest and most important trading tion among suppliers. partners. Total trade in goods and “There’s a lot of magic there,” Mr. services between the U.K. and Timmins said. “There’s very few Canada increased to 32.6 billion in places on earth like London. That’s the period from Oct 2017 to Sept not going to pick up and move sud- 2018, up 7.9 per cent from the denly to some other country.” same period in the year before, Overall, the cost of doing busi- according to the Office for Na- ness in Great Britain and Northern tional Statistics (ONS), the national Ireland is low compared to many statistical institute of the U.K.. “Entrepreneurial activity in lites to connect the Polarstern, other places in Europe. Busi- Despite the uncertainty over the London is really driven by the fact an icebreaking research vessel nesses in the U.K. pay the lowest impact leaving the EU will have on that it’s a giant financial centre, that operates at latitudes beyond rate of corporate tax in the Group the UK, industry leaders say the and [the U.K. leaving the EU] won’t the reach of most geostationary of 20 leading industrial nations, business opportunities outweigh change that,” he said. “It’s the satellites. have lower labour costs than the challenges of a changing politi- home of an incredibly concentrated The U.K. is setting itself up to businesses in Germany, France cal landscape. group of smart people that come be a world leader in the space and Italy and can receive tax relief “Now is the time to take advan- out of globally-renowned universi- industry, and it’s actively recruiting of 230 per cent on research and tage of what could potentially ties like Oxford, Cambridge or the international companies, accord- development costs. be some turmoil and build your London School of Economics.” ing to Jeffrey Osborne, Kepler’s The U.K. government also says it business connections,” said Leigh Access to capital is another co-founder and vice-president remains committed to free trade. Smout, executive director of the advantage. The U.K.’s tech sector of business development. So far, Both Canada and the U.K. have Toronto Region Board of Trade’s attracted more venture capital Kepler has received funding from expressed interest in seeking a World Trade Centre. “If you wait investment and tech IPOs than the U.K.’s Satellite Applications bilateral agreement that could build to see what happens, there will any other European hub in 2018, Catapult – a European Space on the Canada-EU Comprehensive be lots of other people already in according to end-of-year invest- Agency organization that works to Economic and Trade Agreement the mix.” ment data published by London & develop space and satellite-based (CETA) that went into effect in OneEleven Inc., a Toronto-based Partners, the Mayor of London’s products, services and applica- 2017 and allows over 98 per cent business accelerator and innova- promotional agency. The island tions – and is in the process of of Canadian goods to enter the EU tion hub, opened a London, England nation is a global leader in financial establishing a physical presence in without tariffs. office in January. The accelerator technology, and last year British the market. The U.K. Space Agency Whatever happens, business helps to expand technology start- tech firms raised $4.4 billion in wants Great Britain and Northern leaders in both countries have ups that have more than one million investments, the data shows. Ireland to capture 10 percent of expressed a desire to continue dollars in revenue by providing sup- London-based tech businesses are the global space economy by 2030, to work together and reap the port services and office space. benefiting from access to almost estimated to be worth $466-billion. benefits. Building on the success of its double the amount of growth capi- “Being independent of the EU “There probably isn’t a closer Toronto office, the company tal than other European cities such means that the U.K. is taking or better positioned country than says it chose to expand to London as Paris, Berlin and Stockholm, initiatives to be more self-sufficient Canada to take advantage of the because of the city’s vibrant according to the report. when it comes to space, which opportunity to grow trade with the startup ecosystem, which is one of Kepler Communications Inc., creates more support inside of the U.K. because of our cultural and the largest and fastest-growing in a Canadian satellite startup, is country for new companies like historic relationship,” said Mr. the world. currently eyeing U.K. expansion. Kepler,” Mr. Osborne said. Smout. “Build your relationships While the U.K. is leaving the EU, Kepler provides pole-to-pole Other industries see business op- now and take advantage of the op- OneEleven CEO Dean Hopkins said telecom services using a network portunities in the U.K., too. Thomas portunities that’s going to create.” London will remain an entre- of low-cost nanosatellites. One of Timmins, a Toronto-based partner preneurship hub because of its the startup’s clients is Reederei F. at multinational law firm Gowling This content was produced by Globe Content Studio. The Globe’s talented workforce and capital Laeisz Gmbh, a German shipping WLC and head of the global renew- editorial department was not investment. company that uses Kepler’s satel- able energy law practice, said he involved in its creation. WELCOME TO A LAND ALIVE WITH OPPORTUNITY

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20 MARKET OVERVIEW How to protect your portfolio in these wild markets

22 BY THE NUMBERS A graphic look at the figures and faces behind the Top 1000

44 MEGASTARS We rate 250 stocks on the COMPANY PROFILES Top 1000 using our proprietary stock-analysis system, with 20 earning a full five stars

48 THE TOP 1000 Canada’s largest companies, 26 30 34 38 ranked by revenue THE A TEAM MOVING WIND BIG-GAME Royal Bank of Canada is PARTS POWER HUNTING 56 TOP 100 PRIVATES No. 3 on the Top 1000— and it’s there in large part Onex’s bottom line took Will the success of Shopify has brought 58 TOP 100 BY PROFIT thanks to the dominance a beating last year. That Shaw’s mobile acquisition e-commerce to the of its capital markets arm doesn’t mean its strategy be enough to offset the masses. Can it win over 59 TOP 100 BY ROCE of investing in ho-hum declines in its legacy more multinationals?

LUCAS 60 TOP 100 BY INDUSTRY companies isn’t brilliant cable business? LUKE To see this year’s full list of the Top 1000 companies, check out our searchable online tables at tgam.ca/top1000 (subscribers only). Want even more data? You can find the expanded Top 1000 database and other information for sale at the Globe DataStore (tgam.ca/datastore). ILLUSTRATION

MAY 2019 / REPORT ON BUSINESS 19 market’s sluggish performance in MARKET OVERVIEW recent years. As our annual Top 1000 tables, which begin on page 48, show once again, the Canadian market is dominated by financials, energy and PLEASE REMAIN CALM materials. By and large, the Big Six The markets whipsawed between dramatic highs and lows last year, banks recorded solid increases in rev- and experts disagree on which way they’ll head in the rest of 2019. enue and profits in 2018. They have So what can you do to protect your portfolio? soared since the financial crisis, in part because of low interest rates. But the BY JOHN DALY share prices of many energy and mining companies continued to struggle last year, weighed down by weak prices Financial sages often warn investors for oil, metals and other commodities. not to succumb to fear or greed. You Much of the 2019 outlook depends on have to wonder what planet they’re projections for interest rates and com- living on, especially after a tumultu- modity prices. Rosenberg is alarmed ous year like 2018, when stock markets by a traditional warning sign of an veered from one extreme to the other impending recession and market cor- with barely a pause for a Valium in rection: “The U.S. and Canadian yield between. Both the Standard & Poor’s curves are as flat as a pancake,” he 500 Index of leading U.S. stocks and says. The Federal Reserve and Bank of Toronto’s S&P/TSX Composite tum- Canada have hiked short-term inter- bled in the first quarter, rallied in the est rates over the past three years, and summer and then plunged into a tail- in March, yields on short-term U.S. spin last fall to end the year down by Treasury bonds moved above those 9% and 12%, respectively. Yet in the for 10-year bonds for the first time first quarter of this year, they surged since 2007. Long-term rates tend to be back up to about the same levels they based more on market expectations for were at in January 2018. economic growth and inflation, and “The markets are giving us a lot of those yields have sagged—hence the information on a silver platter,” says flat curves. To Rosenberg, that means David Rosenberg, chief economist and “we’re past the peak on growth, past strategist at Gluskin Sheff + Associates the peak on inflation and past the peak in Toronto. Well, yes, they’re certainly on interest rates.” moving in intriguing ways, but analyz- Central bankers also started the year ing the trends doesn’t yield a consensus cautiously. In the Bank of Canada’s offi- forecast. Some experts believe markets cial statement about keeping its policy will climb even higher this year; oth- rate at 1.75% in March, it noted con- ers say they’ll struggle or slump. As is sumer spending, business investment F and exports were all weak, and that often the case, many of the disagree- ments among them are based on differences in basic attitude. “continues to warrant a policy interest Rosenberg, who has a developed a reputation as an often-far-sighted bear in his rate that is below its neutral range”— three-decade career on Wall and Bay Streets, has been warning for two years that meaning no more rate increases any the U.S. bull market in stocks appears to be near its end. While not exactly gloat- time soon. Federal Reserve chair ing, he notes that the S&P 500 peaked near the 3,000 barrier twice in 2018—once Jerome Powell was more straightfor- in January and once in September—yet failed to crack it. Yes, the benchmark index ward in an interview on 60 Minutes: made it back to 2,800 this March, but Rosenberg says that looks like “a very firm “We don’t feel any hurry to change our ceiling,” and U.S. and Canadian markets will likely keep drifting sideways at best. interest rate policy,” he said. “If my forecast of a recession in the coming year proves to be prescient, then there’s Bangsund is more upbeat. To her, more downside to this market than upside,” he says. there is an elephant on the global stage, Yet there are still optimists to be found. Candice Bangsund, vice-president and and that is “the massive amounts of portfolio manager of global asset allocation at Fiera Capital in Montreal, says the stimulus in China over the past six dominant force worldwide in 2019 will be “synchronized global expansion.” This months”—injecting money into its will be led by China, she says, which is aggressively stimulating its economy and banking system, keeping interest rates seems determined to conclude a trade deal with the Trump administration—or low, cutting taxes and spending big on to reduce tensions, at least. Canada, in turn, should benefit from the new United infrastructure. Assuming there’s no States–Mexico–Canada Agreement (assuming it is ratified by legislatures in each trade war with Trump, and possibly a country). Fiera forecasts a 5.6% return for U.S. stocks and a hefty 17.3% for Cana- trade deal, global growth should accel- dian stocks in 2019. “I realize this is a very out-of-consensus call,” Bangsund says. erate, commodity prices will rise and Her projection for Canadian stocks is certainly a stretch, given the Canadian central banks may very well have to

20 MAY 2019 / REPORT ON BUSINESS start raising rates again in the second U.S. stocks have led since the financial crisis, but struggled last year half of the year to contain inflation. In Canada, the key commodity price is crude oil, and it has cast a pall over 60% Alberta since collapsing in 2014 and U.S. INDEX ETF (TSX: XSP) 2015. After bottoming near $30 (U.S.) CANADIAN INDEX ETF (XIU) a barrel in early 2016, the benchmark EUROPE, AUSTRALASIA AND FAR EAST INDEX ETF (XIN) price of West Texas Intermediate 40 (WTI) crude climbed back above $70 (U.S.) last fall. But it then sank below $50 (U.S.) in December, before working its way back to $60 (U.S.) in March. Even without that kind of volatility, 20 the trouble for Canadian producers is that the Western Canadian Select (WCS) benchmark price is stuck in a range lower than WTI, reflecting a 0 shortage of pipeline capacity to trans- 2014 2019 port oil and gas to coastal export terminals and southern U.S. markets. In December, WCS plunged to absurd Average annual return over the past five For value investors in particular, if lows near $5 (U.S.) a barrel, though it’s years (MSCI Canadian-dollar indexes) companies or entire sectors are trading recently made it back above $40 (U.S.). 15.1% at low multiples—as many energy, min- Les Stelmach, an energy expert and ing and forestry firms are on the TSX— portfolio manager with Franklin Bis- 7.7% that ought to provide opportunities. sett Investment Management in Cal- 5.6% 5.0% But George Athanassakos, a professor gary, is impressed that many produc- of finance and the Ben Graham Chair in ers continued to earn solid profits last Value Investing at Ivey Business School CANADAU.S.EUROPE EMERGING year. Those included well-capitalized MARKETS in London, Ontario, says Canada pres- integrated giants, such as Imperial Oil ents some unique challenges. Value and Suncor, but also oil sands specialist Canadian stocks still trade at low investors focus on individual compa- multiples compared to the U.S. Canadian Natural Resources. Stelmach nies and often don’t pay much attention says some smaller companies have P/E ratio (trailing) to the economy or other big-picture additionally learned to become more variables. But commodity price cycles CANADA 17.4 efficient during a slump, such as mid- and economic forecasts are critical fac- size Arc Resources. “I think it is doing U.S. 20.2 tors in valuing Canadian resource pro- an admirable job managing a business viders. “You almost have to be a market through a tough period,” he says. EUROPE 15.5 timer,” Athanassakos says. Despite earning profits for three Timing is always difficult—it often years in a row, however, Arc’s share EMERGING MARKETS 13.1 takes a long time for fundamentals to price has declined by roughly half reassert themselves in markets. To since 2016, and it was dropped from help you pick individual stocks, we But the choice of sectors the S&P/TSX 60 Index in March. That is limited and old school have again added a stock rating sys- is a blow—it means many index funds tem to the Top 1000. Investing expert are no longer obliged to hold its stock. S&P/TSX Composite Norman Rothery has graded the 250 Arc’s troubles are not unique. Price-to- Index by sector biggest stocks on the TSX from one to earnings multiples across the whole FINANCIALS 32.5% five stars, resulting in 20 recommended energy sector remain depressed. ENERGY 18.4% Megastar stocks (page 44). But he starts Stelmach says sentiment among oil MATERIALS 11.1% with a warning this year: His 2018 picks investors won’t improve unless which- INDUSTRIALS 10.6% also looked attractive based on funda- ever party wins the federal election this COMMUNICATIONS 5.7% mentals, yet they lost 16.5%. fall does more to get pipelines built. OTHER 21.7% As in years past, for opportunities in Like a lot of executives and money S&P 500 Index sectors that aren’t well-represented on managers in Calgary, Stelmach is puz- by sector the TSX, such as tech and health care, zled by what he calls the Trudeau gov- experts say you need to turn to the TECHNOLOGY 20.6% ernment’s “conversion factor of impor- United States or markets overseas. But CONSUMER 17% tance” for job losses. “Nine thousand HEALTH CARE 14.8% U.S. markets look highly valued, while hypothetical SNC-Lavalin jobs seem to FINANCIALS 13.3% emerging markets appear cheaper but be greater than 100,000 jobs in Western COMMUNICATIONS 10.1% more volatile. Investing successfully is Canada,” he says. “I’m sorry, but that’s OTHER 24.2% rarely easy, whatever strategy you pur- what it feels like to a lot of people here.” sue. Keep calm and carry on.

MAY 2019 / REPORT ON BUSINESS 21 THETOP1000 BY THE NUMBERS

125 150 17

0 10

TOTAL REVENUE 499 550 COMPANIES COMPANIES $1.9TRILLION REPORTING REPORTING A LOSS A LOSS LAST YEAR THIS YEAR UP 9% FROM 2017

TOTAL NET PROFITS

5 7 $126.6BILLION

DOWN 16%

AGRICULTURAL CONSUMER MOST ENTERTAINMENT PROFITABLE BIOTECH COMPANY

0 ENGINEERING 5 ROYAL BANK OF CANADA DEVELOPERS $12.6 BILLION FORESTRY UTILITIES TECH TRANSPORTATION PIPELINES BROADCAST AND TELECOM DAVID MCKAY FOOD DAVID MINING AND PRECIOUS METALS GAROFALO INDUSTRIAL

INSURANCE

5 2 OIL RETAIL LEAST BANKS OTHER FINANCIAL SERVICES GOLDCORP. NET PROFIT -$5.5 BILLION

REVENUE 0

BIGGEST EMPLOYER ON THE TOP 1000 THREE OVER 30 2 THESE THREE 3 GALEN WESTON JR., LOBLAW COS. LTD. FIRMS HAVE MAINTAINED ROYAL BANK 4 LOBLAW PROFIT THEIR TOP 10 198,000 RANKING IN 5 PER EMPLOYEE $3,868 REVENUE SINCE 1998 6 7 8 ROYAL BANK OF CANADA PROFIT PER EMPLOYEE POWER CORP. OF CANADA 9 $149,630 GEORGE WESTON LTD. 10 1998 2008 2018

22 MAY 2019 / REPORT ON BUSINESS 175 200 225 ($BILLIONS) 250

GREATEST ABSOLUTE INCREASE IN PROFIT BROOKFIELD ASSET MANAGEMENT #1 vs.#2 +$3.9 BILLION MANULIFE FINANCIAL ALIMENTATION COUCHE-TARD VS. BROOKFIELD +$2.7 BILLION IMPERIAL OIL REVENUE ($BILLIONS) +$1.8 BILLION 70

GREATEST ABSOLUTE 60 DECREASE IN PROFIT CENOVUS ENERGY 50 -$6.1 BILLION GOLDCORP 40 -$6.3 BILLION 2008 * BAUSCH HEALTH 30 ** 2 -$8.5 BILLION 0 2 0 0 2 1 *FORMERLY VALEANT PHARMACEUTICALS 20 8 * 9

10 1 QUALITY OVER * QUANTITY NUMBER OF BANKS PROFIT ($BILLIONS) Year Couche-Tard was first listed ON THE LIST UL 4 Flatt’s first year **as CEO of Brascan PA 9 (changed in 2005 to Brookfield) AND

$46 BILLION 3

SHALAN NUMBER OF MINING/PRECIOUS METALS COMPANIES ON THE LIST TT) TOTAL PROFIT 2008 (FLA ** CP; 2 2 0 2 0 0 ON/ 1 2 8 YO * 9

1 1 HANNAH 325 )

COMPENSATION ($MILLIONS) OUCHARD

(B 8

NUMBER OF CANNABIS ALAIN BOUCHARD BRUCE FLATT COMPANIES ON THE LIST

HE/REUTERS: 6

GARY 29 2008 ONLY FOUR OF THEM KAY) WERE PROFITABLE 2 4 0 2 (M C 0 2 0 1 TOTAL LOSS 8

9 HUDSON; -$820 MILLION 9 -$2.3 BILLION 2 1 WADE 2013 PROFIT MISSION ACCOMPLISHED? (WESTON) $5.9BILLION “From a company that does $6 billion (U.S.) in revenue but losing money and burning cash, to a company that is over $1 billion (U.S.) in software (revenue) 2018 PROFIT making money and generating cash—I’d say those would be on my resumé.” —BlackBerry Ltd. CEO John Chen in March, boasting that the company's

PHOTOGRAPHS $43.4MILLION turnaround is complete five years after his arrival

MAY 2019 / REPORT ON BUSINESS 23 THETOP1000 BY THE NUMBERS

AMOUNT OF EQUITY THE RICHEST 100 OWNED BY CEOs PAY PACKETS BY COMPENSATION TYPE BRUCE FLATT BIGGEST BROOKFIELD ASSET MANAGEMENT CASH BONUS 34% $2,153,427,885 BONUS STOCK OPTIONS 25% PIERRE KARL PÉLADEAU QUEBECOR $10,702,912 SHARES 18% $1,670,767,465 LINDA HASENFRATZ BASE SALARY 12% MICHAEL MCCAIN LINAMAR CORP. MAPLE LEAF FOODS PENSION ACCRUAL 6% $1,494,723,829 OTHER COMPENSATION 5% TOBIAS LÜTKE BIGGEST SHOPIFY BASE $1,353,156,022 SALARY

PREM WATSA FAIRFAX FINANCIAL HOLDINGS $1,244,574,812 $3,245,375 GERALD SCHWARTZ JOHN THORNTON ONEX CHAIR, BARRICK GOLD CORP. $1,202,461,922

BIGGEST RAISE ADVISORS LONGEST-SERVING CEOs +1,699%to

WATSA: 34 YEARS GOVERNANCE SCHWARTZ: 35 YEARS

$10,653,557 GLOBAL TOBIAS LÜTKE

SHOPIFY INC. SOURCE P;

ALL IN THE FAMILY /C

Which relative makes more money? NG $15,437,064 TA $12,902,486 TIN $6,647,487 $7,574,173 JUS $4,443,953 $7,046,540 $4,157,592 UTKE)

$2,745,444 (L CP; BE/ CA BLINCH/REUTERS; M C MARK PETER )

POWER CORP. OF CANADALINAMAR CORP.SHAW COMMUNICATIONS DOLLARAMA INC. ON) AIS BROTHER BROTHER DAD DAUGHTER DAD SON DAD SON SMAR

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co-CEO) president emeritus) and CEO) MAIL;

and co-CEO) (ANDRE AND G; OBE GL OOMBER THE YEAR IN FAMILY FEUDS M/ Awkward at reunions and weddings—and bad for business MAGNA INTERNATIONAL LU

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LEON’S FURNITURE Elfriede and son Andrew) vs. MUS Widow of Tom Leon Jr. vs. his brothers daughter Belinda Stronach

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Robert and Kevin The suits and countersuits HASENFRATZ) CHRIS Anita Leon sued to receive SHARE around alleged mismanagement SHARE ) PRICE PRICE JR a share of the family trust. of the family wealth and (LINDA The case was settled in DURING Frank’s spending on DURING AIS 2018 2018 December, two months “idiosyncratic and often SMAR DE

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24 MAY 2019 / REPORT ON BUSINESS TOTAL VALUE OF BIGGEST IPO CANADIAN IPOs BIGGEST IPO IN CANADA IN THE U.S. (2018) CANNABIS $491 MILLION (22.3%) $462MILLION OIL AND GAS CERIDIAN HCM HOLDING $243 MILLION (11%) $2.2BILLION MINING $9.2BILLION(U.S.) $52 MILLION (2.4%) SPOTIFY NUMBER $1.8BILLION OF IPOS KINDER MORGAN 54 $5.1BILLION CANADA 2018 2017

; NUMBER OF IPOs 37 GETTY

THE DOUG FORD EFFECT MORIGI/ The newly elected Ontario UL PA WHO’SOUT WHO’SIN premier bid adieu to Hydro One CEO Mayo Schmidt ALTAGAS LTD. David Harris, who Randall Crawford, most in July and promised to cap (BELINDA) (July 2018) abruptly resigned after an recently a senior VP at U.S. his successor’s pay unspecified “complaint” gas company EQT Corp., after a search that lasted MARKET CAP GUNN/CP; four months JUNE 2018 MAIL FRANK CN RAIL Luc Jobin, who was JJ Ruest, who was CN's $11.6 BILLION AND (July 2018) ousted in March 2018 marketing chief before

OBE APRIL 2019

GL stepping in to replace Jobin $12.4 BILLION STRONACH) M/ as interim CEO LU (FRANK ; FRED LU PA

UCE) POSTMEDIA Paul Godfrey, who'd Andrew MacLeod, UIE (BR NETWORK led the company since who was Godfrey's No. 2 LO

CP; (January 2019) its creation in 2010 S) N/ (he'll remain executive ON’ TO

(LE chairman) BURS LE MAIL;

CO RESTAURANT Daniel Schwartz, who Jose Cil, the former ) AND BRANDS moves up to executive president of Burger King, ORD OBE (F INTERNATIONAL chairman of Tim Hortons' which is also owned GL (January 2019) parent company by Brazilian private equity firm 3G LIN/THE /REUTERS; ZO BO

BA BARRICK GOLD President Kelvin Mark Bristow, the South

CHRIS (January 2019) Dushnisky decamped to African CEO of Randgold AngloGold Ashanti in July, Resources, took over MARIANA

SHAW) where he became CEO the whole shebang after Y) +7% the companies’ merger

(BRADLEY THE SNC SYNDROME

(DUSHNISK AIMIA David Johnston resigned Jeremy Rabe, who

CP; Neil Bruce’s woes began with

H/ (May 2018) the night before the previously ran a Mexican a profit warning and continue OS struggling company’s AGM frequent-flyer program with the DPA scandal MCINT ON/REUTERS;

KS MARKET CAP JEFF JAC JANUARY 2019 CAS RECIPE Bill Gregson, who’d been Frank Hennessey, SHAW)

LU $8.5 BILLION

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LU + CARA OPERATIONS VALEANT PHARMACEUTICALS POTASHCORP FRED = = = Y) HASENFRATZ) RecipeUnlimited BauschHealth NutrienLtd. -31% (FRANK (GODFRE

MAY 2019 / REPORT ON BUSINESS 25

ROYAL BANK OF CANADA

NO. THE A TEAM RBC Capital Markets is becoming the New England Patriots of Bay Street—increasingly, it’s them versus all the other investment dealers

BY ANDREW WILLIS ILLUSTRATIONS BY M.ORE

• • It’s time to acknowledge that when it comes to investment banking, RBC Capital Markets is playing in a different league than its Canadian rivals. The deal-making arm of Royal Bank of Canada churned out $8.4 billion in revenue last year, almost as much as its second- and third- ranked domestic competitors put together. In the same way it seems preordained that football’s New England Patriots will be Super Bowl favourites every year, it now appears certain that RBC Capital Markets will make far more money than any other Bay Street dealer. What’s the secret to this run? Like the most successful coaches in sports, Royal Bank CEO Dave McKay says staying on top in increasingly complex markets starts with keeping things simple. “The beauty of the capital markets strategy is consistency and what I call the simplicity,” he said at a conference in March. “It is [built] around great people, using your balance sheet, creating value, advising and cross-selling, and it takes time to build up those relationships.” To use another gridiron adage, it’s also about the team, rather than individual superstars. When 3 that teamwork kicks in, it can turbocharge revenues and earnings. Like many perennial winners, McKay pushes his team to do better each year, too. RBC Capital Markets earned a $2.8-billion profit in 2018, which translated into a healthy 13% return on equity—a performance REVENUE any other Canadian bank would envy. But McKay isn’t measuring his $60.3 BILLION team mainly against Bay Street rivals such as Bank of Nova Scotia, which posted capital markets revenue of $4.5 billion in 2018. Royal Bank is competing against global players such as JP Morgan Chase, which generated ONE-YEAR CHANGE IN REVENUE $35.4 billion (U.S.) in revenue from corporate and investment banking. 15% RBC Capital Markets began to pull away from the rest of the Canadian bank-owned dealers in the late 1990s, when it found itself advising many PROFIT of its Canadian corporate clients on international expansion plans. The $12.6 BILLION division’s leaders in that era, including long-time CEO Anthony (Tony) Fell, decided that to stay relevant to those clients, it needed to grow with them abroad, with an initial focus on the U.S. market. ONE-YEAR CHANGE IN PROFIT In 2000, Royal Bank spent $1.5 billion (U.S.) to acquire a technology- 10% focused investment bank, Minneapolis-based Dain Rauscher Corp. When the tech bubble burst in 2001, Dain Rauscher started losing money. Royal Bank also targeted relatively small growth companies, NUMBER OF EMPLOYEES which was out of step with its focus on large-cap clients in established 81,870 industries. Veteran real estate banker Doug McGregor was dispatched from the head office in Toronto to Minneapolis to turn things around. ANNUALIZED FIVE-YEAR TOTAL RETURN McGregor and his colleagues stuck with a U.S. expansion strategy, 10.9% but eschewed another acquisition, opting to take a slow-and-steady approach by hiring individuals and some entire teams from U.S. banks. They did the same with British, French and German rivals in Europe.

MAY 2019 / REPORT ON BUSINESS 27 ROYAL BANK EARNINGS BY BUSINESS SEGMENT teamwork became more essential. No one player can do everything for large and complex corporations. PERSONAL & COMMERCIAL Take health care. Derek Neldner, RBC Capital Markets head of global BANKING 48% investment banking, says that a generation back, one banker could be INVESTOR & TREASURY the sole contact with a pharmaceutical company. Now, he says, “if you SERVICES 6% are going to offer serious coverage to a health care client, you need an INSURANCE 6% analyst who can talk authoritatively on medical devices, an expert on pharmaceuticals, one on biotech and so on.” WEALTH MANAGEMENT 18% To cover the cost of employing all those specialists, a bank needs CAPITAL MARKETS 22% global scale, Neldner says. He adds that one of RBC Capital Markets’ most significant internal accomplishments in recent years was devising a compensation system that ensures bankers and traders get paid for If Dave McKay is Royal Bank’s head coach, helping on a transaction even if they don’t have direct ties to that client. the role of quarterback falls to the 61-year-old RBC Capital Markets’ reach now vastly exceeds that of any domestic McGregor, who’s chair and CEO of RBC Capital rival. The firm played a role in $1.5 trillion (U.S.) worth of syndicated Markets and head of the bank’s investor and trea- loans last year, $74 billion (U.S.) in stock sales and $764 billion (U.S.) in sury services. A champion wrestler in his univer- bond offerings for Canadian and international clients. sity days, McGregor looks like he could still pin an Teamwork often boosts revenues, which is why McKay fixates on opponent, and he is disarmingly blunt and direct. cross-selling. Jonathan Hunter, RBC global head of fixed income curren- He says the big-ego Masters of the Universe finan- cies and commodities, remembers working on an acquisition in British ciers made famous by author Tom Wolfe were Columbia for a German client. Along with helping negotiate the deal, never welcome at RBC Capital Markets. McGregor RBC arranged debt financing and used derivatives to hedge currency has hired 31 senior bankers in recent months, and risk. “If our fee was a dollar on a conventional advisory assignment, we says his goal in every interview has been ensuring were able to earn a buck-sixty here by providing extra services while the new partners are a “safe” cultural fit, which also doing a better job for the client,” Hunter says. means “understated and team-oriented.” Size and outsized profits in capital markets also bolster the premium As the bank has expanded internationally— valuation for Royal Bank stock, analysts say. “When the waves pick up, RBC Capital Markets now has 3,300 employees in we prefer to be on a bigger boat,” said CIBC World Markets analyst Rob the U.S., 2,700 in Canada and 1,300 in Europe— Sedran in a recent report on Royal Bank. Like the Patriots, in good mar- McGregor and his colleagues say the concept of kets and bad, McKay’s team just keeps winning. •

With age came wisdom

and the understanding

that one should focus on what’s valuable

and worry not about one’s wealth

Go Far. Together.

Cumberland Private Wealth Management Inc. Toronto | Calgary | Kingston Partner with us by visiting cumberlandprivatewealth.com or call 1 800 929 8296 Entrepreneurial companies drive Canada’s CALL economy. Your success enriches us all. We think that’s worth celebrating. FOR Canada’s Top Growing Companies by Report on Business is a new annual program that ranks private and public Canadian companies ENTRIES on three-year growth. As a winner, you’ll get: — Are you one Your company listed in Report on Business of Canada’s — Trusted recognition that can attract customers, BOLDEST employees and investors — businesses? Access to exclusive events designed to help you learn, network and continue to grow — The praise your company deserves

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PHOTOGRAPH ONEX CORP.

NO.

MOVING PARTS Onex and its brilliant founder, Gerry Schwartz, have an astonishing 35-year track record. The challenge for investors is figuring out what’s happening from year to year

BY DAVID BERMAN

• • When Onex Corp. announced in December that it would sell one of its operating companies, BrightSpring Health Services, to Wall Street LBO giant KKR & Co. Inc. for $1.3 billion (all currency in U.S. dollars except where indicated), the deal underscored the Canadian private 17 equity firm’s reputation as a stellar player in an unglamorous field. Since taking a minority position in BrightSpring, which provides home health care services in the United States, in 2004, followed by a majority stake in 2010, Onex has scored more than a fivefold return on its investment. REVENUE Multiply this success by the scores of investments it has made since $30.9 BILLION 1984, and you can understand why Onex is a major force in the global private equity sector. The deal also demonstrated—yet again—why Gerry Schwartz, Onex’s 77-year-old founder and CEO, remains a vital ONE-YEAR CHANGE IN REVENUE dealmaker, despite shying away from publicity in recent years. -6% On its surface, Onex offers a straightforward model. It scours the world in search of undervalued or tarnished companies that it can pol- PROFIT ish up through cost-cutting, restructuring and expansion. It then holds -$855.9 MILLION onto, sells or lists the companies through an initial public offering. That stable of companies is also huge, making Onex a perennial Top 20 fin- isher in our annual ranking of Canada’s Top 1000 companies by revenue. ONE-YEAR CHANGE IN PROFIT But many of those companies are privately held, so Onex as a whole -128% is hard to value even for some seasoned investors. And the company’s earnings often swing widely from year to year, because profits are affected by deal-making and the shifting fair value of investments on NUMBER OF EMPLOYEES Onex’s balance sheet. Last year, Onex reported a loss of $796 million, 270 down from a profit of $2.4 billion in 2017. That deal-making continues. Onex generated $1.9 billion in 2018 ANNUALIZED FIVE-YEAR TOTAL RETURN through the sale or IPO of several companies, and it invested $2.3 bil- 4.5% lion in nine more. It’s not slowing down. In March, Onex agreed to buy Toronto-based Gluskin Sheff + Associates Inc. for $445 million (Cana- dian), adding high-end wealth management to its stable.

MAY 2019 / REPORT ON BUSINESS 31 wealth funds and financial firms—and it operates a $10.3-billion private lending fund. Onex is cur- BORING OR rently sitting on nearly $8 billion designated for new investments. BRILLIANT? Deploying that money and helping to manage the holdings means profits are often very lumpy. Onex Corp. doesn’t invest in the sexiest businesses, No wonder some investors might prefer to skip the but it usually makes a lot of money helping to revamp them. minutiae of Onex’s myriad parts and instead focus Herewith, some of its biggest current holdings: on the company’s three-decade history of success. Its shares have delivered gains of 7, 100% over the SIG COMBIBLOC GROUP past 32 years, including dividends. And market Swiss-based global supplier of cartons and filling machines capitalization has increased 40-fold since 1990, to for food and beverages $7.5 billion (Canadian). CLARIVATE ANALYTICS But Onex is always facing new challenges. Com- The former scientific and intellectual-property data division of Thomson petition is fierce these days, given the number Reuters of big institutions now on the prowl for private equity investments—companies that don’t have POWERSCHOOL shares trading on stock exchanges—in pursuit California-based supplier of administration and classroom software of stock-market-beating returns. CalPERS, the for schools Ontario Teachers’ Pension Plan and OMERS are SAVE-A-LOT just three of the very active public pension plans. Discount U.S. supermarket chain with 1,300 stores in 36 states Big rival firms like the Carlyle Group, Blackstone, Brookfield Asset Management and KKR are also CARESTREAM HEALTH on the hunt. Medical imaging and health care technology (formerly the health According to consultancy Bain & Co., the value care division of Eastman Kodak) of private equity deals struck in 2018 jumped 10%, PARKDEAN RESORTS to $582 billion, making the past five years the stron- The largest holiday-park operator in the United Kingdom gest stretch in history for the sector. Yet firms still have about $2 trillion in dry powder, a record high that suggests buyers of assets are circling targets. “The vast majority of gains come from the abil- As a result, asset prices are up, once-impressive private equity returns ity to make operational improvements,” says Ben are subsiding, and sweet deals are becoming harder to find. “It’s inter- Sinclair, an equity analyst at Odlum Brown. “This esting,” Schwartz said on a conference call with financial analysts in comes from experience and specializing in certain March, when discussing Onex’s deal pipeline. “In this kind of an envi- industries, and it’s the kind of thing that Onex has ronment, all of the logic would tell you that pricing ought to be coming done for a long time. They have a very strong track down. That logic applies to all of the buyers, but it doesn’t seem to apply record.” to all of the sellers.” Most of Onex’s companies are not household There are internal challenges as well. Onex is struggling with several names, and many of them are far from glitzy, but underperforming operating companies in its portfolio, including Save- bland works. The company’s portfolio has gener- A-Lot (a U.S. discount supermarket chain), Parkdean Resorts (a U.K. ated a 28% average gross annual internal rate of holiday-parks operator) and Survitec (a U.K.-based maker of marine, return since inception. Besides BrightSpring, Onex aviation and defence survival equipment). Because of these setbacks, has turned around and profited from investments the fair value of Onex’s private equity portfolio fell 6% in 2018. in Allison Transmission, TMS and Husky Injec- The decline is weighing on a stock price that has also been affected by tion Moldings, to name just three success stories. volatile equity markets and rising borrowing costs. In early April, Onex’s Among the two dozen current major holdings shares traded around $75 (Canadian) on the TSX, down 28% from a high are KidsFoundation Holdings BV, a Netherlands- in 2017. That price was also a significant discount to net asset value, after based European child-care services company, and Onex had traded at a premium through much of 2016 and 2017. Clarivate Analytics, which operates academic “This isn’t the first time we’ve experienced underperformance,” subscription services and will soon be listed on Schwartz said in the conference call. “A s anyone on our team will tell the New York Stock Exchange following a merger you, we’re focused on improving the performance of all of our busi- with Churchill Capital Group. nesses.” He added: “Turnarounds are difficult and take time to achieve. I “The business is as complicated as you want it to don’t think it’s effective to measure that and look at it quarter by quarter. be,” says Sinclair. “If you go in with the approach At best, you can look at it year by year.” of wanting to count every bean, then you would Analysts generally believe that Onex will power through this bout say that it’s a complicated business.” of turbulence. “We think it’s extremely premature to conclude Onex’s No kidding. Since the majority of Onex’s hold- investing acumen has somehow degraded,” Geoffrey Kwan, an analyst ings are privately held, the value of the whole is at RBC Capital Markets, said in a note. relatively opaque. It also has various operations Kwan rates Onex as his “top pick,” and suggests that buying the shares and funding streams, adding financial layers. On when they’re trading at a discount to net asset value usually rewards top of $6.4 billion of its own capital, the firm man- investors over the longer term, as the discount narrows or disappears. ages another $23.2 billion from outside inves- After all, betting on the acumen of Schwartz and his team of dealmakers tors—which include pension plans, sovereign has been a sound bet for more than three decades. •

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This content was produced by Globe Content Studio. The Globe’s editorial department was not involved in its creation. 34 MA Y 20 19 / REPOR T ON BUSINE SS

PHOTOGRAPH SHAW COMMUNICATIONS INC.

NO.

WIND POWER Shaw Communications’ new wireless business—formerly known as Wind Mobile—is thriving. Will its success be enough to offset declines from the legacy cable business?

BY CHRISTINE DOBBY

• • It’s been more than three years since Shaw Communications Inc. made what chief executive officer Brad Shaw called “the pivot,” jumping into telecom with both feet with the $1.6-billion acquisition of wireless startup Wind Mobile. To pay for the deal and related spending, the family-controlled company shuffled its television operation, Shaw Media, over to Corus Entertainment (also controlled by the Shaw family) for $1.9 billion in cash, plus Corus shares worth a further $800 million. Since the acquisition, Wind Mobile—now dubbed Freedom Mobile— has been thriving. The division has attracted almost 500,000 new sub- 63 scribers under Shaw’s ownership—increasing its subscriber base by 50%, to about 1.5 million, and grabbing market share away from the Big Three (BCE, Rogers Communications and Telus). However, that success may be obscuring troubles beneath the sur- REVENUE face. Shaw still hasn’t bundled wireless with its residential services, $5.2 BILLION something that could help persuade customers to stay with the company. And other problems are bubbling up at Shaw’s cable operation— its TV, Internet and home phone business—which accounts for about ONE-YEAR CHANGE IN REVENUE 90% of its EBITDA (earnings before interest, taxes, depreciation and 3% amortization). The move into wireless was all part of a plan to help the Calgary-based PROFIT player tackle the threat posed by its biggest rival, Telus. Both compa- $132 MILLION nies sell residential services in Alberta and British Columbia; Telus, the Vancouver-based telephone company that did not traditionally offer television, swooped into the video market about a decade ago with the ONE-YEAR CHANGE IN PROFIT launch of Optik TV. The Internet protocol television (IPTV) service -85% finally offered an alternative to cable, and by 2015, Telus had more than a million TV customers. As Telus surged, Shaw shed hundreds of thousands of subscribers, shaking the bedrock of the legacy cable operator. NUMBER OF EMPLOYEES Shaw’s father, JR Shaw, started the business in the 1960s and spent 13,000 years consolidating smaller cable players, building Shaw into the country’s fourth-largest cable company by 1985. (It’s now the second-largest ANNUALIZED FIVE-YEAR TOTAL RETURN after Toronto-based Rogers). Despite its size, Shaw has long remained 5.5% a family affair: JR, now 84, remains executive chair, and Brad’s older brother Jim (who died last year at the age of 60) was also CEO for a dozen years. The Shaw clan maintains control of the company through

MAY 2019 / REPORT ON BUSINESS 35 SHAW’S STOCK HAS LAGGED ITS RIVALS IN RECENT YEARS Telus on faster home Internet across its entire coverage area, and two years ago it 140 (% CHANGE IN SHARE PRICE) launched a new Internet-based TV platform to woo customers back from IPTV. Plus, it 120 can count on a “solid balance sheet,” says SHAW Casey. But the analyst, who has a hold rating on the stock, cautions: “Unfortunately, 100 TELUS execution remains inconsistent.” ROGERS Veritas Investment Research analyst Des- 80 BCE mond Lau has a sell rating on Shaw’s stock, warning that the cable operation is losing 60 QUEBECOR television subscribers at a much faster pace than it’s picking up Internet customers. The 40 profit margins on television service are not as high as those on Internet (because cable 20 companies must pay for the rights to the television content, increasing the expense of serving each customer). That means 0 Shaw could replace lost TV customers 2014 2015 2016 2017 2018 with fewer Internet subscribers and still increase its overall EBITDA. But to do that, Lau estimates Shaw needs to gain 35 Inter- a dual-class share structure. net customers for every 100 TV subscribers it loses, and recent trends Shaw made a few stabs at the wireless business show the company is only gaining seven Internet customers for every (selling an early investment in Fido, an aborted 100 TV subscribers lost. plan to buy airwaves and build its own network, He says Shaw missed a chance to take Telus on more aggressively and an investment in WiFi hotspots) but had no by investing in upgrades to its Internet speeds. Telus’s legacy copper real strategy before buying Wind Mobile. Part of telephone wire infrastructure was much slower than Shaw’s cable Inter- the rationale for the investment was to one day net, but Telus has been steadily building fibre-optic cable to customers’ bundle cellular service with Shaw’s TV, Internet homes for the past several years and now reaches more than half of its and home phone services, emulating the model service area with the faster service. Telus can now offer gigabit-per- used by Telus and the other national carriers. second download speeds in many areas, surpassing Shaw’s top offering Freedom Mobile’s momentum has many finan- for residential customers of 600 megabits per second. Both are fast and cial analysts bullish about Shaw’s prospects. Out likely sufficient for most homes, but Telus can now run away with a of 18 analysts tracked by Bloomberg, 10 have buy marketing advantage. ratings on the stock, five have holds and three have “It would have made sense to upgrade to gigabit speeds on Internet sell ratings. Freedom started off with a patchy net- in 2015, when Shaw was first talking about it. Now [Telus CEO] Darren work in urban areas of Ontario, British Columbia Entwistle is saying up to 70% of Telus’s footprint will have fibre by the and Alberta, and the service didn’t work with end of this year,” Lau says. “The window of opportunity Shaw should many of the most popular smartphones. Shaw have capitalized on—where they could have offered gigabit speeds— has spent $785 million on capital investments has passed. They still have the ability to do it but wouldn’t gain as much and equipment costs associated with its wireless of an advantage now.” business since buying Freedom, leading to faster Another area of concern is a massive restructuring that the company speeds and more reliable coverage. (Shaw started undertook last year that included voluntary buyout offers. Those buy- looking for a buyer for its Corus shares last sum- outs will ultimately see 3,300 employees leave the company—roughly mer, since a sale could provide more cash to invest 25% of Shaw’s total workforce. That was five times more than the com- in wireless.) pany hoped would volunteer for the generous packages—which, cru- cially, gave Shaw no right to turn down employees who wanted to take • • Those improvements finally led to an agree- a payout. ment with Apple Inc., allowing Freedom to sell The restructuring also includes a shift toward promoting online the iPhone directly to customers beginning in customer service and “self-install” options for TV and Internet. Shaw late 2017. It was a pivotal point for the carrier that expects to save $215 million a year once the process is complete. But “changed all aspects of our wireless business,” Lau is skeptical about whether those savings will materialize. The com- according to Shaw president Jay Mehr. In 2018 pany introduced smaller restructuring plans in 2014 and 2015, promising alone, Freedom added about 320,000 contract cus- annual savings of $125 million, but he says that by 2017, EBITDA at the tomers. And subscribers are buying more expen- cable division was $78 million lower than 2015 levels. “That makes me sive plans too: The company’s average monthly uncertain about whether Shaw will be able to achieve its promised sav- charge for wireless customers increased to $41.99 ings this time.” as of the end of November, up 16% since Shaw In a recent earnings call, Shaw’s Mehr reflected on the restructuring. bought the carrier. “Most of the heavy lifting is behind us,” he said. “It really has enabled Even Shaw’s cable division has a number of fac- a new Shaw…a modernization of how we do business.” Still, it will all tors working in its favour, says BMO analyst Tim come down to execution, and as BMO’s Casey says, for Shaw, the cable Casey. The company currently has an edge over division remains a “show-me story.” •

36 MAY 2019 / REPORT ON BUSINESS SPONSOR CONTENT

The family business is a minded than they were even cornerstone of the Canadian a decade ago to talking about economy. governance. Research from the University of Toronto found that family Paron: I think the perception businesses tend to survive of the formality of governance longer and are less risky than sometimes is the antithesis of non–family-controlled compa- what an entrepreneur thinks nies. But for all their successes, their strength is, which is speed family businesses face ex- and agility. But they are not traordinary challenges as they incompatible. What we always evolve over generations. When try to emphasize is to just put it comes to corporate gover- a bit more formality around nance and succession, how can things like sounding boards and owners protect their family’s informal networks. legacy and ensure business continuity? Fullbrook: Some families have Mario Paron is the Canadian PROTECTING THE formed advisory boards and managing partner of KPMG treat the decisions made in Enterprise, which services LEGACY OF THE those boardrooms as seriously Canada’s entrepreneurs and as a formal fiduciary board. private companies and Matt Some barely have any fam- Fullbrook is the manager of FAMILY BUSINESS ily involvement in boardroom the David & Sharon Johnston decisions and delegate them Communication and governance can Centre for Corporate Gover- almost entirely to an external nance Innovation at the Rotman head off hassles, advisors say board of directors. The right an- School of Management. swer is not the same for every Paron and Fullbrook sat down company. to discuss some of the pressing Fullbrook: I find there’s more things. How much of this needs issues facing family businesses interest in getting the rising to start with the founder under- Paron: To me, the key point is today, including how confident generation educated with re- standing their own expectations that all those models are better Canadian business owners are spect to things like: What does and ambitions before thinking than no governance at all. in their succession plans. it mean to be a passive owner? about how they are going to What does it mean to be an engage the next generation? I Fullbrook: Especially at the be- Matt Fullbrook: I don’t think active shareholder? What does imagine if you haven’t thought ginning, the exercise of creating I’ve seen any research on suc- it mean to be a board member? about where you want the an external board for the first cession planning in any sector, That way, as the next genera- business to be in 20 years, then time can start out as a bit of an let alone family–owned busi- tion transitions into roles in the it’s going to be really difficult to exercise in self-discipline and nesses, that says most leaders business, they’ve got more of have that conversation. humility. It’s important for the are really confident about a formal understanding, rather founder or family to understand succession and the continu- than just trial by fire. Paron: It’s pretty hard to come that they need to be willing to ity of the business. That said, up with a road map if you don’t listen and respect their input. among the owners I’ve spoken Paron: Right, and that’s know what your destination Yo u need people you trust, but with, the ones who seem the certainly an area that we at is. Entrepreneurs are often also people who are willing to most confident are the ones KPMG in Canada see ourselves working 60 to 80 hours a week, push you out of your comfort who have had the foresight and playing an important role. A so they’re consumed in the zone. Or what’s the point? courage to involve the family as couple of years ago, we started day-to-day of the business and much and as early as possible. a program called FamilyShift™ not asking questions like, ‘Do I Paron: Yo u want quality people Mario, what about you? to educate the younger gen- keep this business or sell it? Do surrounding you and you have erations, giving them some the kids have an interest in join- to be open to differing views. Mario Paron: Communica- fundamentals of what it would ing the business? If so, when?’ Business is different today – it tion is absolutely critical. The look like to either inherit the From extensive work with is more global, increasingly reality is, when you move wealth or to take over the reins family businesses, I am increas- digital and change is happening from founder to kids to cousin of a business. We built it be- ingly seeing the recognition that faster than ever. Owners need consortiums, the complexity cause our clients were coming more formal governance is a a diversity of perspectives from increases. Yo u should be having to us asking where they could key element of sustaining the trusted voices to effectively conversations early on around get some formal training. business. manage this. who will work in the business, who can own shares in the Fullbrook: Mario, you get a Fullbrook: I agree. Certainly This content was produced by Globe Content Studio. The Globe’s business, who’s active versus little bit more hands-on opportu- among the families that I speak editorial department was not passive. nity than I do to work on these with, they’re much more open- involved in its creation.

Ready to Plan now for a successful succession get started? Our Family Office services help prepare your business for the next generation. So are we. Let's do this. © 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. kpmg.com/ca/letsdothis 38 MA Y 20 19 / REPOR T ON BUSINE SS

PHOTOGRAPH SHOPIFY INC.

NO. BIG-GAME HUNTING Shopify has experienced massive growth by getting thousands of small merchants to use its e-commerce platform. But its success might lie in winning over large multinationals

BY TIM SHUFELT

• • When Forbes magazine declared Kylie Jen- ner the world’s youngest ever “self-made” bil- lionaire, it perhaps undervalued a couple of key contributors to the 21-year-old’s wealth. The first is the Jenner-Kardashian family into which Kylie was born, which bestowed the kind of fame that can be leveraged into a wildly successful cosmetics business. The second is the made-in-Canada e-commerce platform that provided the venue for her to establish it. In a little over three years since Ottawa-based 159 Shopify helped launch the Kylie Cosmetics online store, a $1-billion business has emerged out of thin air, selling “lip kits” with a full-time staff of just seven and with essentially zero spending on tra- REVENUE ditional marketing. Through Shopify, other celeb- $1.4 BILLION rities, including Drake and Justin Bieber, are also selling merchandise directly to their fans. “These are business models that were impossible to cre- ONE-YEAR CHANGE IN REVENUE ate a decade ago, when they had to go through 61% a third-party retailer,” says Harley Finkelstein, Shopify’s chief operating officer. “The direct-to- PROFIT consumer movement is exploding, and Shopify is -$83.4 MILLION at the epicentre of it.” Shopify has recently hit some milestones of its own. In January, it became the largest publicly ONE-YEAR CHANGE IN PROFIT listed Canadian tech name, with a market capi- -61% talization in excess of $30 billion. In February, it posted its first annual revenue figure in excess of $1 billion. And in March, its stock was anointed to NUMBER OF EMPLOYEES the ranks of Canada’s corporate elite as one of the 4,000 newest members of the S&P/TSX 60 Index. Profit- ability, on the other hand, is nowhere on the hori- ANNUALIZED TOTAL RETURN SINCE 2015 IPO zon, but that’s hardly what investors want from 76.4% such a high-growth stock, to which many of the traditional valuation metrics don’t really apply. By bringing e-commerce to the masses, Shopify

MAY 2019 / REPORT ON BUSINESS 39 DESPITE CRITICISM FROM SHORT SELLERS, SHOPIFY’S STOCK products,” MacMillan says. HAS TRENDED UPWARD AS REVENUE HAS INCREASED By the end of 2018, Shopify Plus accounted for 25% of the company’s total monthly recurring $350 revenue, contributing an increasing share to a growing top line. Last year’s sales in total rose SHOPIFY REVENUE U.S. (MILLIONS) by 59% over the prior year. And at least for the 300 time being, Shopify’s emphasis is very much on SHOPIFY SHARE PRICE (DOLLARS) growth over earnings. There are too many expansion opportunities to worry about being profit- 250 able right now, Finkelstein says. “We’re trying to leave as little oxygen in the atmosphere for any- 200 one else and trying to capture as much growth for ourselves as possible.” All of that makes it tricky to put a fair value on Shopify’s fast-moving stock. 150 Richly priced at about 12 times next year’s sales estimate, investors are counting on the company sustaining a considerable rate of growth. A poten- 100 tial slowdown has been one of the concerns raised by short sellers over the past couple of years, but 50 their attacks on Shopify have proven to be mere blips on an otherwise upward trajectory. There is certainly plenty of market potential. 0 The total value of goods sold on Shopify’s plat- 2015 2016 2017 2018 form was $41 billion (U.S.) last year. Meanwhile, e-commerce sales globally reached $2.3 trillion has become the platform of choice for would-be Internet merchants. (U.S.) in 2017, according to Statista. And that num- And yet, it’s still a bit player by global standards, claiming a mere sliver ber only accounted for about 10% of retail sales of the total e-commerce market. Expanding the basic offering interna- worldwide, which are still dominated by brick- tionally will be key to the next stage of growth, as will stalking bigger and-mortar retail. “They’ve scaled up to $1 billion game—larger merchants and established brands with more sophisti- [in revenue],” says Ron Shuttleworth, a partner at cated requirements that are looking to cut out the middleman and con- Toronto-based Oak Hill Financial and a veteran nect directly with their customers. of the Canadian technology sector. “The question Simplicity has always been core to Shopify’s approach. New merchants now is, how do you get to $10 billion?” Interna- can choose a theme and domain name for their site, upload images of tional expansion is one part of the answer, Shuttle- their inventory, activate payment services, add in third-party applica- worth says. tions and be live in a matter of hours, for as little as $9 (U.S.) per month. Last year, U.S. merchants accounted for 70% of By the end of last year, Shopify had more than 820,000 merchants. Many the business done through Shopify. But pushing of those nascent businesses will fail. But for the minority that survives into other countries requires navigating the intri- and grows, their needs will evolve over time. “The aspirational mer- cacies of each individual market, from payment chant is the top of the funnel,” says Ross MacMillan, an analyst at RBC systems to shipping and returns. “E-commerce Dominion Securities. “You need to offer a path to that merchant that is very much a local market,” MacMillan says. turns it into a global brand.” Last year, Shopify Payments—the company’s In 2014, the company introduced Shopify Plus for those managing integrated credit card payment processor—was larger online stores. Priced at a base of $2,000 (U.S.) per month, the introduced in a number of countries, including enterprise product features multiple staff accounts, dedicated support Germany, whose consumers generally prefer to and the ability to handle thousands of transactions per minute. What pay directly through debit or via invoice rather started as a way for Shopify’s homegrown success stories to upgrade, than on credit. So Shopify partnered with Swed- however, has since drawn in several multinational brands and large con- ish bank Klarna to offer German shoppers flexible sumer packaged goods companies delving into e-commerce. Unilever, payment methods. Navigating such local nuances for example, uses Shopify Plus to sell Maille mustard direct to consum- requires a methodical and thoughtful expansion, ers. Mondelez International launched a store for customized Oreo pack- Finkelstein says. aging to celebrate the 100th birthday of the cookie. That kind of rigour and restraint will be needed For substantial, established brands, the direct-to-consumer chan- for taking Shopify into the next phase in its evo- nel has some distinct benefits that traditional retailing cannot offer. lution, Shuttleworth says. While the company is Through an e-commerce platform, consumer companies can sell currently the darling of the Canadian technol- premium items at a higher price point, offer an individually tailored ogy sector, the ghosts of tech champions past still product and collect data on their customers. And Shopify may be bet- loom large. “Canadian tech has a habit of flaming ter suited to hosting that kind of experience than an online market- out at a certain scale,” says Shuttleworth, invoking place like Amazon.com, MacMillan says. “In some ways, they’re the the collapse of Nortel Networks and BlackBerry’s anti-Amazon.” While Amazon’s priority is on the consumer, Shopify handset business. “I don’t think we’ll see that with focuses on merchants trying to strengthen their brands. “They’re Shopify. This is a disciplined management team, playing to the idea that consumers will care about brands and will buy and Shopify has the flexibility to zig when they from a particular merchant, as opposed to just purchasing white-label need to zig, and zag when they need to zag.” •

40 MAY 2019 / REPORT ON BUSINESS Congratulations to theserecent appointees

Phillip Crawley, Publisher & CEO of The Globe and Mail, extends best wishes to the following individuals who were recently featured in the Report on Business Section of The Globe and Mail newspaper. Congratulations on your new appointments.

Piyush Bhatnagar Curtis Cusinato Laura Inglis Barbara Kimmitt Amanda McLachlan Romeo Rojas Norman M. Steinberg to Office Managing to Partner, Toronto to Partner to Partner to Partner to Partner to Vice Chair Director, Toronto Bennett Jones LLP Bennett Jones LLP Bennett Jones LLP Bennett Jones LLP Bennett Jones LLP BFL CANADA Accenture

Jane Peverett Colleen Abdoulah James C. Cherry Pippa Dunn Philippe Jetté Samih Elhage Philippe Jetté to Board of Directors to Board of Directors to Board of Directors to Board of Directors to Board of Directors to Board of Directors to Board of Directors Capital Power Cogeco Cogeco Cogeco Cogeco Cogeco Cogeco Communications Communications Communications Communications

Mairead Lavery Alister Campbell Lori Evans Dr. M. Ian Bowmer Caroline Biron to President & CEO to President & CEO to Board of Directors to President to Managing Partner Export Development PACICC Plan International The Royal College Woods LLP Canada (EDC) Canada of Physicians and Surgeons of Canada

MAY 2019

To make arrangements for an Appointment Notice, please call 1-800-387-9012 or email [email protected] View all appointment notices online at www.globeandmail.com/appointments SPONSOR CONTENT

DRIVEN BY DATA

Shell’s telematics solution is helping fleet managers cut costs and increase productivity

Addison Parfeniuk doesn’t While it’s only been a few prevent what he estimates Creating need to be in the office to see months since Parfeniuk began to be about $15,000 in repair greater insights where the vehicles in his fleet using the solution, his business costs by getting the vehicle There are other telematics are headed. A franchise owner is already benefiting. “From my off the road and straight to a solutions on the market, but of Two Small Men with Big computer or phone, I can see mechanic. what sets Shell’s system apart Hearts, a national residential where my trucks are, whether “Fuel is a significant cost for is its integration with its fleet and commercial moving they’re idling, speeding, braking a business like ours,” says fuel-card program, says Sandra company, can just look at his harshly or driving aggressively,” Parfeniuk. “By leveraging Mailloux, Shell’s business phone and know exactly where he says. “I have more visibility Shell’s telematics solution, we development manager. his 34 vehicles are located, over my assets and that helps can track the efficiency of fuel Its cards, when used at a whether it’s in Winnipeg, me sleep soundly at night, spending in a whole new way.” gas station, can track fuel Vancouver or anywhere in that’s for sure.” Shell’s solution, Parfeniuk efficiency, prevent fraudulent between. says, allows his company to spending and connect with When Parfeniuk became a Data that makes compare fuel spending by other telematics data to deliver Two Small Men franchisee in a difference transaction date with kilome- even greater insights. “It’s one 2010, he had a single truck, “Before the advent of analytics, tres driven in the same period. thing to have access to data, which made it easy to keep much of the data companies The system also segments the but if that data isn’t connected, track of his vehicle’s where- would produce was housed in data by region, which allows fleet managers miss out on im- abouts and its diagnostic and clunky spreadsheets and would Parfeniuk to see which markets portant context,” says Mailloux, maintenance needs. As his have been impossible to track,” are using fuel more efficiently, who expects Shell’s solution fleet expanded, though, it says Sherry Calkins, associ- and to quickly take corrective to be publicly available by the became much more difficult to ate vice-president of strategic action. fall. “Our system connects the analyze the reams of informa- partners at Geotab, a global “Gathering this data manually dots, helping managers identify tion his trucks were producing leader in data analytics. Now, is possible, but it’s extremely issues and maximize their sav- each day. “managers want data to tell time consuming,” he says. ings.” In 2018, Parfeniuk started them exactly what they need to “With Shell, we save adminis- That kind of integration helps using Shell’s telematics solu- know,” she notes. “Telematics trative time and money while Parfeniuk keep spending under tion, an innovative system that solutions can produce action- the telematics program does control and by combining pre- collects copious amounts of able data and filter out all of the that work for us.” dictive analytics with big data, vehicle data and can produce noise.” As well, thanks to all the driver the system can help him iden- up to 40 customizable reports As interesting as it is to sift performance data the system tify expenditures that could, to help fleet managers run their through the information, a gathers, including whether one day, become too costly. business more efficiently. telematics solution ultimately someone is driving too aggres- “Big data is the most important Shell’s system, which is cur- has to benefit the company in sively, he’s been able to work aspect of fleet management,” rently being piloted in Canada, some way. Within one quarter, with his drivers to improve their explains Geotab’s Calkins. records hundreds of data points using reports and alerts, Two own efficiency and safety. “Our “It’s critical to have access to each second, giving managers Small Men has eliminated drivers have become more every data point to see the full valuable insights on everything nearly all unnecessary idling accountable, because they’re picture.” from how long it takes to and the associated cost. On aware of the measurements Whether he’s in his office or complete a drive, to how many one occasion, Parfeniuk was being taken, which not only not, that’s exactly what Parfe- times a driver hits the brakes, informed by the system that improves their own safety, but niuk gets. to how often they’re wearing a vehicle’s engine was about can extend the service life of their seatbelt. to overheat. He was able to our vehicles,” he says.

This content was produced by Globe Content Studio. The Globe’s editorial department was not involved in its creation. FLEET RESULTS YOU CAN SEE Shell Fleet Solutions supports every vehicle, route, driver and budget to command a top-performing fleet. With a personal account manager, easy access to online card management and one of the largest fuel networks in Canada — you can trust that all of your moving pieces are in the right place.

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Discounts* on *Certain restrictions apply.10% Discount (before applicable taxes) on products and services on every visit at Jiffy Lube locations, including Jiffy Lube Signature Services Oil Changes and other preventative maintenance services. Valid for Jiffy Lube Signature Service® Maintenance Oil Change services and additional preventative maintenance services which vary by location. Visit www.jiffylube. ca to locate a Jiffy Lube service center near you and view the services offered. Jiffy Lube® and Jiffy Lube Signature Service® are registered trademarks of Services with Jiffy Lube® International, Inc. Jiffy Lube service centres are owned and operated by independent franchisees.

™Trademark of Shell Brands International AG. Used under license. The Shell Fleet Navigator MasterCard Corporate Fleet Card® is issued by WEX Canada pursuant to a license by MasterCard International Incorporated. MasterCard and MasterCard Corporate Card are registered trademarks of MasterCard International Incorporated. 1000

MEGASTARS Not sure which Top 1000 companies to buy? We analyzed the data for you to arrive at a shortlist of 20 recommended stocks, based on both value and momentum BY NORMAN ROTHERY

he Top 1000 is the most authoritative rank- last year, with the Megastar team losing an ing of Canada’s largest companies. It reveals average of 16.5% since March 2018. The S&P/ key information on every major public cor- TSX Composite Total Return index, mean- poration in the land, and our Megastar sys- while, climbed 5.9% over the same period. It tem highlights firms with the best value and was a disappointing year for the Megastars. momentum characteristics. The more appeal- That’s a painful loss, but successful inves- ing a firm’s stock is, the more stars it gets. tors take the bad with the good. For instance, I Our Megastar team is made up of the 20 recently highlighted a simple system that fol- stocks that achieve a full five-star ranking lows stocks with the lowest price-to-earnings each year. The team’s first outing, from 2017 ratios in the S&P/TSX 60 Index each year. It to 2018, was quite profitable. If you had pur- walloped the market over the long term, with chased all 20 five-star stocks, dividing your average annual gains of 16.7% from the end portfolio evenly among them, and held them of 2002 to the end of 2018. But it trailed the for one year, you would have gained 16.2%. By index in five of the 16 annual periods, often by way of comparison, the market gained 2.6% a substantial margin. It also produced some over the same period as measured by the S&P/ unpleasant downturns along the way, includ- TSX Composite Total Return index. (All of ing a 43% loss in 2008.

the return figures mentioned herein include We do believe the Megastar system has what LUCAS reinvested dividends. They do not, however, it takes to succeed over the long term because include index-fund fees, commissions, taxes it combines two proven schools of invest- LUKE or other trading frictions.) ing. It starts with value investing principles, But as every stock picker knows, setbacks which narrow in on profitable companies that happen. And unfortunately, the tide turned trade at low prices relative to their fundamen- ILLUSTRATION

44 MAY 2019 / REPORT ON BUSINESS tals. Those principles are enhanced by trend- following techniques used by momentum MEGASTAR STOCKS investors who favour recent winners. Both These 20 stocks got a five-star rating using our approaches are strengthened by measures of proprietary value-momentum stock-rating system. quality that help investors avoid fragile businesses. Air Canada (AC) returns Cogeco Communications The Megastar system is based entirely on to our Megastar list for the (CCA) is a cable company the numbers and has nothing to do with our third year in a row. The stock based in Montreal that intuitions about a stock or the less tangible gained 22% over the past conducts business in Quebec, year and a total of 105% since Ontario and in 11 states along aspects of its business. As a result, the num- it first became a Megastar the east coast of the U.S. ber of stars a stock gets does not reflect the stock. Air Canada runs the The firm trades at 12 times character of a company, its management or largest airline in the land from earnings and pays a 2.5% employees. It is entirely possible for the stock its headquarters in Montreal indicated dividend yield. of an outstanding company to get a low rat- and flies customers to more ing when it is in a downtrend. Similarly, strong than 220 destinations on six Corus Entertainment momentum can make a slightly less than won- continents. Hopefully the (CJR.B) is a Toronto-based derful business into an attractive investment. firm’s strong momentum will media company with 44 continue well into 2020. specialty TV channels, 15 We think our system offers a rational and TV stations and 39 radio objective take on the largest stocks in Canada Capital Power (CPX) is stations. It trades at 3.5 times and hope you’ll enjoy this year’s Top 1000. a power producer based its fiscal 2018 free cash flow Below, we explain the system in more detail in Edmonton that owns and pays a 4.1% dividend and how we go about awarding the stars. If 5,100 megawatts of power yield. The Shaw family you’re anxious to see the results, check out the generation capacity at 25 controls both Corus and Shaw new list of top 20 stocks in the “Megastar stocks facilities in North America. Communications (SJR.B). The firm trades at seven 2019” box starting right here on this page. times cash flow and pays a Empire Co. (EMP.A) is hefty indicated dividend yield best known as a food retailer FINDING VALUE of 5.8%. Income investors will that hails from Stellarton, We start our analysis with a company’s bot- cheer management’s plans to Nova Scotia. Its Sobeys tom line by searching for bargain stocks that boost the dividend by 7% per subsidiary operates more have low price-to-earnings ratios. It’s a classic year for the next three years. than 1,500 food stores and value investing approach that leads to profit- more than 350 retail fuel Cogeco Inc. (CGO) is locations across Canada. able firms trading at relatively low prices. based in Montreal and Empire also owns a 41.5% Legendary investor and author James controls cable company interest in Crombie REIT O’Shaughnessy studied the ratio for the fourth Cogeco Communications (CRR.UN), along with other edition of his influential book What Works on (CCA) via ownership of 32% real estate investments and Wall Street. He reported that U.S. stocks with of its equity shares. The partnerships. While Empire the lowest 10% of price-to-earnings ratios parent also has a small hit a rough patch in 2016, gained an average of 16.3% annually from the media arm that operates it has recovered nicely and start of 1964 through to the end of 2009. By 22 radio stations in Quebec gained 23% over the past 12 and one in Ontario. Practically months. way of comparison, the average stock gained speaking, investors should 11.2% annually over the same period. hold either Cogeco or Enerflex (EFX) supplies We don’t stop at considering just one ratio, Cogeco Communications. natural gas compression, however. We also like stocks trading at low At this point, the parent gas processing, refrigeration prices in comparison to their revenues. On company trades at 10 times systems and electric power the other hand, we avoid companies that have earnings and offers a slightly generation equipment. While yet to generate revenue and those that trade at better value. the firm makes its home in Calgary, in 2018, 58% of its very high price-to-revenue ratios. revenues came from the U.S., We also take into consideration a firm’s 18% from Canada and the cash flow and look for those with low price- remainder from abroad. Its to-cash-flow ratios. After all, it’s reassuring to stock gained 22% over the see a company’s earnings translate into cold, past year and is nearing a hard cash. 10-year high. Speaking of cash, we appreciate firms that pay generous dividend yields because we like to be compensated for taking on the risk of stock ownership. In addition, we gravitate to firms that reduce their share counts by buying back stock. We add up the value of these transactions in an effort to gauge how much money a firm is returning to shareholders.

MAY 2019 / REPORT ON BUSINESS 45 MOVING WITH MOMENTUM Equitable Group (EQB) Martinrea International Momentum investors love to buy stocks on provides financial services (MRE) is another Megastar across Canada through alumnus, with its third the upswing because they have a habit of con- Equitable Bank. The Toronto- five-star award. While the tinuing to climb. Conversely, stocks on the based firm trades at 91% of auto-parts firm’s stock has decline tend to persist in sliding, at least in the book value and seven times fallen by 15% since last year, short term. earnings. While it pays a it climbed by 31% in its prior 1000While it might seem overly simplistic, buy- relatively modest indicated outing. Martinrea makes its ing based on momentum has been profitable dividend yield of 1.8%, it home in Vaughan, Ontario, in nearly every stock market in the world for has increased its dividend and trades at six times payments frequently over earnings and four times decades. It has also worked well when applied the past eight years. cash flow. to many other asset classes. For instance, O’Shaughnessy reports that Exchange Income (EIF) Morguard Corp. (MRC) the 10% of U.S. stocks that performed the best is an acquisitive aerospace- is a real estate investment over the prior six months went on to generate focused conglomerate company based in average annual returns of 14.1%, based on data based in Winnipeg. While Mississauga. Its publicly from the start of 1927 through to the end of the firm has been subject to listed subsidiaries are 2009. The average stock climbed at an annual pressure from short sellers, Morguard REIT (MRT.UN), industry analysts are keen Morguard North American rate of just 10.5% over the same period. on its prospects. It currently Residential REIT (MRG.UN) We take a blended approach when it comes pays an exceptionally large and Temple Hotels (TPH). to momentum and combine the results from dividend yield of 6.7%, The firm and its subsidiaries several periods. We favour stocks that have which is just covered by its own 214 properties across performed well, compared to their peers, over earnings yield of 6.9%. North America. Morguard the past three, six, nine and 12 months. With Corp. trades at seven times a little luck, they’ll continue to do well in the Gibson Energy (GEI) is earnings and has reduced an integrated midstream its share count by 5% from next several months. company based in Calgary. last year. It has two oil terminals in CONSIDERING QUALITY Alberta and nearly 12 million The North West Co. The market does a reasonably good job of barrels of storage capacity. (NWC) is a retailer in pricing in many of the outward signs of qual- While the company lost underserved and remote ity. That’s why our approach aims to reduce money in 2015 and 2016, it communities in Northern risk rather than enhance reward. has recovered since then, Canada, Western Canada, with its stock jumping 50% Alaska, the South Pacific To start, we appreciate companies with over the past 12 months. islands and the Caribbean. solid returns on equity. It’s also useful to look Despite the recent advance, The Winnipeg-based firm for a pattern of growth and to seek out firms Gibson pays a hefty dividend sold almost $2-billion worth that have grown their earnings-per-share at yield of 5.9%. of goods over the past 12 a reasonable rate over the past year. On the months. It trades at 0.8 other hand, investors should be cautious with Magna International times sales and pays a 3.9% firms that industry analysts believe will have (MG) is another company dividend yield. negative earnings over the next 12 months. to make the Megastar list for three years running. The Parex Resources (PXT) The final quality indicator is a technical one. auto-parts maker based in makes its home in Calgary, Highly volatile stocks are penalized, while Aurora, Ontario, has climbed but explores and produces firms with steadier return patterns are given 14% since it was added oil in Colombia. The firm a boost. The idea is to avoid stocks that act to the team. Magna grew grew its revenues by 66% like lottery tickets, because they often fail to its sales by 11% over the to $1.3 billion in 2018, while compensate investors for the risks involved. last four quarters and its generating profits of $522 earnings by 5% while trading million. It trades at six at just eight times earnings. times earnings, four times GETTING TO THE TOP It also managed to reduce its cash flow and has a strong The Top 1000 follows a wide variety of com- share count by 9% over the balance sheet with no long- panies, from the very large to the very small. same period. term debt. The problem is, our star system runs into trouble dealing with all of them in a fair way. For instance, penny stocks can experience large price swings that might cause trouble for momentum-based approaches. Similarly, junior resource firms that have yet to earn a cent in profit don’t stand a chance of passing the value test. We use several factors to deal with such cases. We start by grading only the largest 250 stocks by revenue on the TSX—the remain-

46 MAY 2019 / REPORT ON BUSINESS POT STOCKS 2019

INVESTORS ARE Power Corp. of Canada ing 750 don’t make the cut. Stocks are also set EUPHORIC ABOUT (POW), the Montreal-based aside when they have less than a year’s worth CANNABIS STOCKS, financial conglomerate, has of trading history or have traded for under $2 BUT ARE THEY a 65.5% interest in wealth A LITTLE TOO HIGH? management firm Power per share over the same period. We exclude Financial (PWF), which itself stocks with very high price-to-sales ratios, Speculators are keen has a 67.7% interest in insurer those with tiny market capitalizations and on cannabis stocks. Great-West Lifeco (GWO). All those subject to takeover offers. But we hope After all, the product is three firms made it into this many of them will be up for five-star consid- extraordinarily popular, and year’s Megastar list. Power eration next year. the industry is poised to Corp. also has a sprawling list grow by leaps and bounds. of international operations. The happy outlook is just THE MEGASTAR STOCKS It offers a dividend yield of the sort of thing to make 5.3% and recently announced While you might wonder how any stock can hearts go pitter-patter. a hefty share repurchase pass all our tests, we focus on how well they They might apply a program, which helped lift do in comparison to their peers. It’s a contest momentum approach to its stock. in which the best candidates take home the find interesting candidates. top prize. Our star system gives a full five stars To help them, we ranked six Power Financial (PWF) is to only 20 of the largest 250 stocks. They can large TSX-listed cannabis the main arm of Power Corp. be found in the “Megastar stocks 2019” side- stocks using a composite The Montreal-based firm momentum score that fac- owns 67.7% of Great-West bar starting on page 45. tors in each stock’s three-, Lifeco and 61.4% of money Detailed data for all our Top 1000 stocks, six- and 12-month returns. manager IGM Financial including the star ratings out of five for the Top marks go to those with (IGM). Power Financial pays a largest 250 companies by revenue, can be 5.8% indicated dividend yield, the best relative results. found online at tgam.ca/top1000. We also pro- The winner is Cronos trades at 11 times earnings vide detailed data on the largest 200 stocks by and also recently announced Group (CRON), which a big share repurchase plan. revenue in the following pages. (We couldn’t climbed 137% over the past include all 1,000 of them due to space con- 12 months. It’s followed by Great-West Lifeco (GWO) straints, but subscribers have access to the full Canopy Growth (WEED), of Winnipeg is the health and online listing.) Canntrust (TRST), Hexo life insurance arm of Power While the Top 1000 represents a great start- Corp. (HEXO) and Aphria Financial (PWF). It trades ing point for further research, you should (APHA). Trailing behind, Aurora Cannabis (ACB) at 10 times earnings, pays a improve your understanding of each com- 5.3% indicated dividend yield sits in last place with pany by studying it and its industry. Get up to and has a big share buyback a loss of 7% over the past plan in the works. speed on any recent developments, and read 12 months. the latest press releases and regulatory filings. A word of caution is Quebecor Inc. (QBR.B) Before dashing off to the market, be mind- in order. Momentum is a is a cable and media ful of the built-in limitations of quantitative devil-take-the-hindmost company based in Montreal. methods like ours, because less tangible fac- approach. It works well Its telecom operations tors can also be important when investing. on the way up but it can generated the vast majority For instance, the quality of a company’s cul- suffer shocking reversals of its revenues and profits ture and management can help, or hinder, a on the way down. As a over the past year. It trades result, conservative souls business. at five times cash flow and should join us stodgy value sports strong momentum, But be sure to look up the facts and figures investors who are happy with one-year gains of 29%. that mean the most to you. After all, the pur- to wait for the industry to pose of our star system is to guide you through mature before enjoying its Rogers Sugar (RSI) the market to stocks that might deserve a spot pleasures. refines and sells a range of in your portfolio. sugars, and it recently added maple syrup to its lineup. The Vancouver-based firm is the Norman Rothery, PhD, CFA, is the founder of StingyInvestor.com, which has smallest Megastar this year, with revenues of $807 million been catering to investors since 1995. He obtained a PhD in atomic physics from and a market cap of $639 York University before following his passion for investing to work for investment million. But it offers income counsel firms Dan Hallett & Associates and Fundmonitor.com. His quantitative investors a sweet dividend methods and portfolios have appeared in numerous magazines for almost two yield of 5.9%. decades. His U.S. value method sprang to life in 2001 and has gained an average of 16.2% per year so far. A Canadian growth-at-a-reasonable-price method outperformed the market by an average of 8.2 percentage points per year since it started in 2004. Rothery currently holds shares of Magna, Martinrea, Power Corp., Power Financial and Wajax in his personal account, as well as other less highly rated Canadian stocks.

MAY 2019 / REPORT ON BUSINESS 47 THETOP 1000 The companies listed here are drawn from the 1,000 largest publicly traded Canadian corporations, measured by assets. The top 200 are ranked here according to trailing 12-month revenue in Canadian dollars to the end of their most recent available quarter. The full list of 1,000 can be found online at tgam.ca/top1000

REVENUE COMPANY AND YEAR-END STOCK REVENUE REVENUE PROFIT PROFIT ASSETS ASSETS STOCK RANK RANK TICKER $000 1-YEAR $000 1-YEAR $000 1-YEAR $ PRICE 2018 2017 % CHANGE % CHANGE % CHANGE

1 1 Alimentation Couche-Tard(Oct18)QC1 ATD.B 78,846,637 37 2,409,524 32 29,980,203 11 75.00 2 3 Brookfield Asset Management(Dec18)ON1 BAM.A 78,490,827 38 4,665,476 145 338,649,713 33 60.9 3 4 Royal Bank of Canada(Jan19)ON RY 60,337,000 15 12,569,000 10 1,366,207,000 7 102.8 4 10 Toronto-Dominion Bank(Jan19)ON TD 55,461,000 20 11,319,000 11 1,322,506,000 5 74.8 5 6 Magna International Inc.(Dec18)ON1 MG 53,354,537 11 2,972,965 5 34,283,723 2 66.94

6 8 Power Corp. of Canada(Sep18)QC POW 49,373,000 6 1,355,000 -16 453,710,000 5 28.8 7 5 George Weston Ltd.(Dec18)ON WN 48,605,000 1 574,000 -25 43,814,000 14 92.96 8 11 Enbridge Inc.(Dec18)AB ENB 48,578,000 6 2,882,000 1 166,905,000 3 48.1 9 12 Power Financial Corp.(Sep18)QC PWF 48,343,000 7 2,130,000 -5 448,524,000 5 29.9 10 9 Loblaw Cos. Ltd.(Dec18)ON L 46,744,000 0 766,000 -50 30,153,000 -14 64.7

11 7 Great-West Lifeco(Dec18)MB9 GWO 44,032,000 -6 3,094,000 36 427,689,000 2 30.9 12 13 Bank of Nova Scotia(Jan19)ON BNS 42,339,000 15 8,405,000 1 1,034,283,000 12 72.2 13 14 Suncor Energy(Dec18)AB SU 39,757,000 17 3,293,000 -26 89,579,000 0 43.7 14 2 Manulife Financial(Dec18)ON9 MFC 38,972,000 -33 4,800,000 128 750,271,000 3 22.1 15 18 Imperial Oil(Dec18)AB IMO 34,667,000 21 2,314,000 372 41,456,000 0 36.5

16 17 Bank of Montreal(Jan19)ON BMO 34,356,000 19 5,987,000 24 806,597,000 11 102.8 17 15 Onex Corp.(Dec18)ON1 ONEX 30,895,177 -6 -855,889 -128 60,014,024 2 74.5 18 16 Sun Life Financial(Dec18)ON9 SLF 28,301,000 -7 2,616,000 17 271,827,000 1 50.3 19 21 CIBC(Jan19)ON CM 26,397,000 22 5,122,000 11 614,647,000 5 111.8 20 57 Nutrien Ltd.(Dec18)SK1 NTR 25,644,366 335 4,693,712 993 60,126,343 168 70.80

21 19 Empire Co.(Nov18)NS EMP.A 24,742,300 3 328,500 263 8,733,900 1 29.3 22 24 Husky Energy Inc.(Dec18)AB HSE 23,350,000 20 1,457,000 85 35,225,000 7 13.94 23 20 BCE Inc.(Dec18)QC BCE 23,304,000 2 2,929,000 -2 57,100,000 2 59.18 24 23 Fairfax Financial Holdings Ltd.(Dec18)ON1 FFH 22,994,812 9 510,892 -76 85,061,293 0 638.2 25 25 Canadian Natural Resources(Dec18)AB CNQ 22,690,000 17 2,591,000 8 71,559,000 -3 35.8

26 22 Bombardier Inc.(Dec18)QC1 BBD.B 21,277,770 0 301,416 n/m 32,979,501 0 2.8 27 26 Cenovus Energy(Dec18)AB CVE 20,863,000 20 -2,669,000 -179 35,174,000 -14 11.00 28 27 Air Canada(Dec18)QC AC 18,073,000 9 167,000 -92 19,197,000 8 33.1 29 29 Metro Inc.(Dec18)QC MRU 15,333,200 4 621,100 -65 10,847,300 25 49.2 30 30 Rogers Communications Inc.(Dec18)ON RCI.B 15,261,000 6 2,059,000 12 31,918,000 5 70.94

31 28 TransCanada Corp.(Dec18)AB TRP 15,228,000 -2 3,702,000 17 98,920,000 15 59.9 32 34 Canadian National Railway Co.(Dec18)QC CNR 14,999,000 13 4,328,000 -21 41,214,000 10 115.96 33 41 Parkland Fuel Corp.(Dec18)AB PKI 14,427,000 50 206,000 150 5,661,000 5 38.36 34 32 Telus Corp.(Dec18)BC T 14,399,000 7 1,600,000 3 33,065,000 6 47.40 35 33 Canadian Tire Corp.(Dec18)ON CTC.A 14,041,900 5 692,100 -6 17,286,800 11 145.38

36 35 Teck Resources Ltd.(Dec18)BC TECK.A 13,519,000 11 3,107,000 26 39,626,000 7 28.9 37 38 Saputo Inc.(Dec18)QC SAP 13,210,400 15 761,100 -14 10,050,400 26 44.5 38 36 Hudson’s Bay Co.(Nov18)ON HBC 12,040,000 1 -744,000 9 12,979,000 -1 7.5 39 40 CGI Inc.(Dec18)QC GIB.A 11,655,891 6 1,167,611 12 12,872,452 8 88.2 40 44 National Bank of Canada(Jan19)QC NA 11,081,000 18 2,154,000 8 263,355,000 5 61.61

41 37 Bausch Health Cos.(Dec18)QC1 BHC 10,975,153 -7 -5,447,461 -277 42,934,929 -13 31.31 42 43 Intact Financial Corp.(Dec18)ON IFC 10,649,000 13 707,000 -2 28,461,000 2 109.08 43 42 SNC-Lavalin Group(Dec18)QC SNC 10,168,634 7 -1,316,898 -445 12,939,692 -6 35.2 44 39 Industrial Alliance Insurance(Dec18)QC IAG 9,923,000 -12 634,000 19 63,540,000 3 50.96 45 31 Barrick Gold Corp.(Dec18)ON1 ABX 9,496,280 -31 -2,044,157 -208 29,904,603 -11 17.3

46 46 Celestica Inc.(Dec18)ON1 CLS 8,614,480 8 129,329 -6 4,938,997 32 11.8 47 45 Fortis Inc.(Dec18)NL FTS 8,460,000 0 1,166,000 13 53,051,000 11 48.15 48 48 WSP Global Inc.(Sep18)QC WSP 7,837,400 15 235,100 -2 6,554,300 7 69.8 49 60 Pembina Pipeline Corp.(Dec18)AB PPL 7,798,000 42 1,278,000 45 26,664,000 4 48.9 50 50 Encana Corp.(Dec18)AB1 ECA 7,754,836 15 1,408,269 29 20,275,562 1 8.96 Industry groups agri = agriculture, banks = banks, bcast = broadcasting, bio = biotech & pharmaceuticals, chem = chemicals, consumer = consumer products, dev = real estate developers, eng = engineering & construction, ent = entertainment, env = environmental services, fin = financial services, food = food production or distribution, forest = forest products, indust = industrial products, insur = insurance, mgt = management companies, mining = mining, oil = integrated oils, oilprd = oil & gas production, oilserv = oil & gas field services, other = other, paper = paper products & packaging, pipe = pipelines, pmetals = precious metals, pub = publishing & printing, retail = retailers, serv = services, steel = steel, tech = technology, tele = telephone utilities, textile = textiles & apparel, trans = transportation, trust = trust company, util = gas & electrical utilities, whole = wholesaler Notes For ranking purposes, figures from

48 MAY 2019 / REPORT ON BUSINESS STOCK MARKET PRICE- PRICE-TO- PRICE-TO- DIVIDEND RETURN ON RETURN ON DEBT-TO- INDUSTRYBUY RATING $ PRICE CAP $000 TO-SALES EARNINGS CASH FLOW YIELD % EQUITY % 1-50CAPITAL % EQUITY OUT OF 5

11 75.00 42,323,096 0.5 17.9 12.6 0.7 23.2 13.9 0.9 retail 33 60.92 60,533,413 0.7 13.1 16.5 1.3 4.1 4.4 1.2 mgt 7 102.87 147,625,960 2.5 12.1 10.5 3.7 17.4 25.3 0.1 banks 5 74.83 136,998,764 2.5 12.4 885.0 3.6 15.3 21.1 0.1 banks 2 66.94 21,912,079 0.4 7.7 4.5 2.6 20.1 19.1 0.4 indust

5 28.87 13,449,718 0.3 10.6 1.8 5.1 3.6 5.3 0.3 mgt 14 92.96 14,257,285 0.3 23.9 5.0 2.1 3.9 6.1 1.2 food 3 48.17 97,399,740 1.7 33.0 7.9 5.6 3.9 4.4 0.9 pipe 5 29.91 21,358,626 0.4 10.7 2.7 5.7 6.4 7.6 0.2 fin -14 64.78 24,084,619 0.5 32.6 9.8 1.8 6.0 7.5 0.7 retail

2 30.99 30,610,044 0.7 10.3 4.7 5.0 12.5 11.2 0.3 insur 12 72.25 88,553,285 2.1 10.7 -9.1 4.6 13.5 17.6 0.0 banks 0 43.70 69,241,951 1.8 21.6 6.6 3.3 7.4 9.5 0.4 oil 3 22.16 43,677,425 1.1 9.5 1.6 4.1 11.3 9.9 0.1 insur 0 36.54 28,594,925 0.8 12.7 7.3 2.0 9.5 10.7 0.2 oil

11 102.83 65,647,046 1.9 11.4 4.1 3.7 14.2 21.4 0.1 banks 2 74.53 7,490,525 0.2 -8.6 4.2 0.6 -12.4 2.7 4.0 mgt 1 50.35 30,134,475 1.1 11.1 7.9 3.8 11.7 11.4 0.2 insur 5 111.87 49,648,159 1.9 9.9 3.8 4.8 15.8 20.6 0.1 banks 168 70.80 43,084,312 1.6 10.5 15.9 3.0 21.8 17.3 0.4 mining

1 29.32 7,960,553 0.3 24.4 9.2 1.5 8.6 9.3 0.4 retail 7 13.94 14,011,397 0.6 9.9 3.4 2.0 7.9 8.9 0.3 oil 2 59.18 53,155,501 2.3 19.1 7.2 5.1 16.7 11.1 1.2 tele 0 638.24 17,441,184 0.7 41.2 -14.1 2.1 2.3 3.3 0.4 insur -3 35.85 43,087,613 1.9 16.9 4.3 3.7 8.1 8.0 0.6 oilprd

0 2.84 6,740,576 0.3 23.9 8.5 0.0 -5.2 11.9 -2.3 indust n/r -14 11.00 13,516,690 0.6 -5.1 6.3 1.8 -14.3 -11.2 0.5 oilprd 8 33.16 8,977,404 0.5 53.5 3.3 0.0 4.5 6.9 1.6 trans 25 49.26 12,594,994 0.8 19.5 23.7 1.5 12.5 12.0 0.5 retail 5 70.94 36,520,811 2.4 17.7 8.5 2.7 26.3 14.8 2.0 bcast

15 59.93 55,015,740 3.6 15.3 8.4 4.6 14.2 8.7 1.6 mgt 10 115.96 83,873,868 5.6 19.7 14.3 1.6 25.2 21.4 0.7 trans 5 38.36 5,127,504 0.4 24.7 11.1 3.0 12.0 10.9 1.3 retail 6 47.40 28,392,600 2.0 17.7 7.0 4.3 16.2 11.5 1.4 tele 11 145.38 9,144,667 0.7 13.5 11.5 2.5 12.6 10.8 1.0 retail

7 28.95 16,521,765 1.2 5.4 3.7 1.0 14.4 16.6 0.2 mining 26 44.52 17,314,589 1.3 22.7 18.0 1.4 15.1 14.8 0.5 food -1 7.53 1,380,288 0.1 -2.6 -3.0 0.7 -52.8 -13.0 2.5 retail 8 88.26 24,317,229 2.1 21.3 16.6 0.0 17.3 18.5 0.3 tech 5 61.61 20,670,134 1.9 10.2 6.3 4.0 17.3 25.9 0.1 banks

-13 31.31 10,954,464 1.0 -2.0 5.5 0.0 -97.3 -8.5 8.6 bio 2 109.08 15,182,696 1.4 22.8 18.2 2.6 9.9 10.0 0.3 insur -6 35.23 6,184,767 0.6 -4.7 -20.4 3.3 -29.7 -14.7 1.0 eng 3 50.96 5,532,993 0.6 9.1 14.3 3.1 12.4 13.0 0.2 insur -11 17.34 20,250,467 2.1 -10.0 8.7 1.0 -15.1 -2.0 0.6 pmetals

32 11.83 1,389,831 0.2 12.4 37.0 0.0 7.6 6.1 0.5 tech 11 48.15 20,632,275 2.4 18.5 7.9 3.6 6.9 5.6 1.3 util 7 69.89 7,277,589 0.9 30.9 11.0 2.1 7.8 9.0 0.3 other 4 48.99 24,886,920 3.2 21.5 11.0 4.5 9.9 9.2 0.5 pipe 1 8.96 8,534,400 1.1 6.1 2.8 0.9 15.1 13.5 0.6 oilprd companies that report in foreign currencies have been converted to Canadian dollars, and partial-year results have been annualized. Foreign currencies are converted at the end of the relevant fiscal period for balance sheet items and at the average exchange rate for the relevant period for earnings items. Percentage change is based on the 12 months ending in the month indicated beside each company name. Returns have been rounded to one decimal place. Footnotes 1. Company reports in U.S. dollars. 9. Revenue includes unrealized gains and losses on bonds and other assets, as required by international accounting standards. These gains and losses are often substantial for life insurers, and can vary widely from year to year. Abbreviations n/m = not meaningful, n/r = not ranked

MAY 2019 / REPORT ON BUSINESS 49 THETOP 1000

REVENUE COMPANY AND YEAR-END STOCK REVENUE REVENUE PROFIT PROFIT ASSETS ASSETS STOCK RANK RANK TICKER $000 1-YEAR $000 1-YEAR $000 1-YEAR $ PRICE 2018 2017 % CHANGE % CHANGE % CHANGE

51 49 Canadian Pacific Railway Ltd.(Dec18)AB CP 7,749,000 15 1,951,000 -19 21,254,000 6 275.04 52 51 Linamar Corp.(Dec18)ON LNR 7,670,849 17 591,481 8 8,133,421 39 50.50 53 56 Restaurant Brands International(Dec18)ON1 QSR 7,019,719 18 793,336 -6 26,614,317 -5 84.2 54 53 Finning International(Dec18)BC FTT 7,008,000 12 232,000 7 5,696,000 12 23.6 55 47 Thomson Reuters Corp.(Dec18)ON1 TRI 6,972,231 -1 5,216,271 183 22,525,906 -36 72.18

56 59 Gibson Energy Inc.(Dec18)AB GEI 6,948,520 20 151,048 242 2,809,576 -5 22.2 57 52 Emera Inc.(Dec18)NS EMA 6,683,000 5 746,000 154 32,314,000 12 47.7 58 54 Waste Connections Inc.(Dec18)ON1 WCN 6,405,291 6 710,098 -5 16,685,753 5 113.6 59 55 Hydro One Ltd.(Dec18)ON H 6,218,000 4 796,000 18 26,442,000 3 20.38 60 61 West Fraser Timber Co.(Dec18)BC WFT 6,026,000 18 810,000 36 4,791,000 6 67.60

61 72 First Quantum Minerals(Dec18)BC1 FM 5,206,553 21 575,479 n/m 31,101,792 9 14.04 62 74 Methanex Corp.(Dec18)BC1 MX 5,202,323 27 737,856 80 6,090,331 0 76.5 63 62 Shaw Communications Inc.(Nov18)AB SJR.B 5,183,000 3 132,000 -85 15,384,000 7 27.3 64 65 CCL Industries Inc.(Dec18)ON CCL.B 5,179,000 8 466,700 -2 7,027,600 14 53.90 65 63 TFI International(Dec18)ON TFII 5,169,688 5 291,994 85 4,049,960 9 39.58

66 68 Canfor Corp.(Dec18)BC CFP 5,075,400 11 354,900 3 3,845,100 10 14.68 67 67 BRP Inc.(Oct18)QC DOO 5,050,500 9 259,500 -15 2,972,900 15 37.50 68 66 Atco Ltd.(Dec18)AB ACO.X 5,032,000 8 328,000 50 23,344,000 7 45.3 69 58 Lions Gate Entertainment(Dec18)CA1 LGF.A 4,836,728 -17 -52,790 -109 11,338,008 -2 15.70 70 70 WestJet Airlines Inc.(Dec18)AB WJA 4,771,929 5 91,465 -67 6,758,055 4 20.4

71 69 Cascades Inc.(Dec18)QC CAS 4,730,000 3 59,000 -88 4,951,000 12 8.2 72 73 Canadian Utilities Ltd.(Dec18)AB CU 4,663,000 12 634,000 23 21,819,000 5 36.00 73 83 Keyera Corp.(Dec18)AB KEY 4,469,459 30 394,224 36 6,782,698 15 31.8 74 76 Stantec Inc.(Dec18)AB STN 4,291,000 6 47,400 -51 4,009,900 3 31.5 75 71 Kinross Gold Corp.(Dec18)ON1 K 4,191,596 -5 -36,372 -105 10,655,505 -1 4.50

76 86 Russel Metals Inc.(Dec18)ON RUS 4,166,600 26 219,000 77 2,127,300 21 23.5 77 64 Goldcorp Inc.(Dec18)BC1 G 4,101,869 -15 -5,481,460 -731 22,420,194 -22 14.38 78 75 Quebecor Inc.(Sep18)QC QBR.B 4,098,300 0 350,300 -21 9,101,700 -5 31.50 79 103 AltaGas Ltd.(Dec18)AB ALA 4,086,900 56 -435,100 -574 23,487,700 134 17.6 80 87 Constellation Software(Dec18)ON1 CSU 4,023,742 24 494,407 71 3,878,838 28 1,134.2

81 81 Just Energy Group(Dec18)ON JE 3,798,097 9 230,124 15 1,866,248 35 4.8 82 79 Gildan Activewear(Dec18)QC1 GIL 3,785,112 6 456,097 -3 3,970,273 1 47.40 83 84 Westcoast Energy Inc.(Dec18)AB W.PR.H 3,767,000 9 622,000 n/m 15,116,000 -2 25.21 84 82 Open Text Corp.(Dec18)ON1 OTEX 3,705,444 7 339,746 38 10,213,633 0 50.3 85 91 Colliers International(Dec18)ON1 CIGI 3,677,927 20 127,907 88 3,115,306 64 87.81

86 77 Martinrea International Inc.(Dec18)ON MRE 3,665,478 -1 185,883 17 2,913,811 15 12.6 87 78 Crescent Point Energy Corp.(Dec18)AB CPG 3,540,900 -4 -2,616,900 -2,010 12,730,400 -20 4.04 88 108 Toromont Industries Ltd.(Dec18)ON TIH 3,513,154 49 251,984 43 3,234,531 13 67.50 89 80 Maple Leaf Foods(Dec18)ON MFI 3,498,794 -1 101,378 -38 3,127,811 19 27.39 90 88 Dollarama Inc.(Oct18)QC DOL 3,426,864 8 539,722 7 2,141,984 10 36.3

91 85 Dorel Industries Inc.(Sep18)QC1 DII.B 3,358,185 2 -8,290 -123 2,847,635 -5 16.0 92 97 Aecon Group Inc.(Dec18)ON ARE 3,282,675 16 59,015 109 2,932,692 16 18.39 93 89 IGM Financial Inc.(Dec18)MB IGM 3,249,071 3 776,168 27 15,608,714 -5 33.13 94 104 Seven Generations Energy Ltd.(Dec18)AB VII 3,247,900 32 439,900 -22 8,119,500 11 9.70 95 93 NFI Group Inc.(Sep18)MB1 NFI 3,238,092 9 248,225 26 2,691,704 11 33.70

96 99 MEG Energy Corp.(Dec18)AB MEG 3,172,337 14 -119,197 -172 8,409,477 -10 5.0 97 98 Norbord Inc.(Dec18)ON1 OSB 3,141,033 12 478,500 -15 2,566,159 -8 35.7 98 92 AutoCanada Inc.(Sep18)AB ACQ 3,128,020 3 -35,880 -166 1,773,743 5 12.7 99 96 Cott Corp.(Dec18)ON1 BCB 3,123,273 6 485,109 n/m 4,196,106 -22 19.88 100 95 CAE Inc.(Dec18)QC CAE 3,113,200 6 307,800 -6 6,294,500 15 27.90

50 MAY 2019 / REPORT ON BUSINESS STOCK MARKET PRICE- PRICE-TO- PRICE-TO- DIVIDEND RETURN ON RETURN ON DEBT-TO- INDUSTRYBUY RATING $ PRICE CAP $000 TO-SALES EARNINGS CASH FLOW 51YIELD % EQUITY % -100CAPITAL % EQUITY OUT OF 5

6 275.04 38,643,120 5.1 20.1 14.5 0.9 29.8 21.9 1.3 trans 39 50.50 3,300,402 0.4 5.6 4.6 0.7 17.1 15.5 0.7 indust -5 84.28 21,199,159 2.9 26.0 13.6 2.8 15.0 6.9 3.3 retail 12 23.65 3,887,634 0.6 17.1 15.0 3.3 11.4 11.9 0.7 whole -36 72.18 39,705,591 5.6 7.9 14.6 2.5 36.3 26.3 0.3 other

-5 22.24 3,214,987 0.5 21.2 5.7 5.9 18.1 13.7 1.6 oilserv 12 47.77 11,183,912 1.7 15.7 6.6 4.8 10.4 7.2 2.0 mgt 5 113.67 29,926,049 4.6 41.6 16.1 0.7 8.6 8.1 0.6 env 3 20.38 12,145,236 2.0 15.6 7.7 4.5 7.8 6.0 1.2 other 6 67.60 4,719,753 0.8 6.2 5.5 1.0 28.8 31.6 0.3 forest

9 14.04 9,679,050 1.8 16.3 3.7 0.1 4.2 4.2 0.7 mining 0 76.55 5,914,504 1.1 8.2 4.6 2.3 32.0 25.1 0.8 chem 7 27.34 13,911,425 2.7 113.9 10.5 4.3 2.1 4.6 0.9 bcast 14 53.90 9,579,984 1.9 20.4 12.4 1.0 19.3 14.8 0.9 paper 9 39.58 3,419,617 0.7 11.9 6.3 2.2 19.5 14.3 1.0 trans

10 14.68 1,838,221 0.4 5.3 3.4 0.0 16.4 19.9 0.2 forest 15 37.50 3,642,480 0.7 14.6 5.8 0.9 -108.2 52.0 -3.2 indust 7 45.37 5,186,604 1.0 15.8 5.2 3.3 4.5 6.0 1.5 mgt -2 15.70 4,393,080 0.9 -94.7 -0.6 0.0 -1.2 0.3 1.2 ent n/r 4 20.42 2,326,831 0.5 25.5 3.1 2.7 4.0 4.4 0.9 trans

12 8.23 775,831 0.2 13.3 2.1 1.9 3.6 6.0 1.1 paper 5 36.00 9,813,348 2.1 17.3 11.3 4.4 12.8 8.1 1.6 util 15 31.83 6,699,538 1.5 16.7 10.8 5.4 15.1 12.6 0.9 oilprd 3 31.55 3,529,186 0.8 75.1 20.4 1.8 2.5 3.7 0.5 other -1 4.50 5,626,030 1.3 -340.5 5.4 0.0 -0.5 3.0 0.4 pmetals

21 23.57 1,463,860 0.4 6.7 16.6 4.7 23.9 22.7 0.6 whole -22 14.38 1,247,508 0.3 -2.3 1.2 0.7 -34.5 -30.9 0.3 pmetals n/r -5 31.50 7,269,624 1.8 21.1 5.3 0.6 59.3 11.8 -29.6 pub 134 17.67 4,862,784 1.2 -12.1 -61.5 12.2 -10.4 -3.0 1.3 oilprd 28 1,134.22 24,035,857 5.9 48.0 27.5 0.5 51.6 46.8 0.4 tech

35 4.82 720,649 0.2 3.3 -12.2 10.4 -236.3 47.0 4.5 util 1 47.40 9,799,117 2.5 21.6 13.8 1.2 17.6 14.8 0.3 textile -2 25.21 3,630,240 1.0 n/m 3.0 0.0 21.2 9.1 1.8 pipe n/r 0 50.35 13,481,352 3.6 38.9 12.2 1.5 7.0 7.7 0.7 tech 64 87.81 3,443,305 0.9 26.7 10.1 0.2 16.7 15.1 0.9 other

15 12.64 1,044,457 0.3 5.9 3.5 1.3 17.6 15.6 0.6 indust -20 4.04 2,222,612 0.6 -0.8 1.3 8.9 -33.2 -27.9 0.6 oilprd 13 67.50 5,482,781 1.6 21.8 10.8 1.3 20.6 19.0 0.5 whole 19 27.39 3,381,241 1.0 33.8 11.3 1.8 5.0 6.7 0.2 food 10 36.34 11,626,807 3.4 11.3 21.2 0.9 -465.7 49.3 -8.8 retail

-5 16.01 519,351 0.2 -61.0 4.3 9.8 -0.6 1.6 0.5 consumer 16 18.39 1,112,201 0.3 18.8 3.0 2.7 7.4 6.2 0.8 eng -5 33.13 7,980,531 2.5 10.4 10.2 6.8 16.7 16.5 0.4 fin 11 9.70 3,420,220 1.1 8.0 1.9 0.0 9.5 11.8 0.4 oilprd 11 33.70 2,102,405 0.6 8.3 14.0 5.5 25.3 18.9 0.8 indust

-10 5.07 1,504,984 0.5 -12.7 5.4 0.0 -3.0 1.6 1.0 oilprd -8 35.76 2,921,592 0.9 6.3 3.6 21.4 40.3 34.3 0.7 forest 5 12.72 348,750 0.1 -6.6 20.7 3.1 -7.1 -0.2 2.4 retail -22 19.88 2,707,559 0.9 5.5 8.9 1.6 37.2 14.6 1.1 food 15 27.90 7,393,939 2.4 24.3 14.8 1.4 13.5 12.0 0.6 indust

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MAY 2019 / REPORT ON BUSINESS 51 THETOP 1000

REVENUE COMPANY AND YEAR-END STOCK REVENUE REVENUE PROFIT PROFIT ASSETS ASSETS STOCK RANK RANK TICKER $000 1-YEAR $000 1-YEAR $000 1-YEAR $ PRICE 2018 2017 % CHANGE % CHANGE % CHANGE

101 90 Transat A.T. Inc.(Oct18)QC TRZ 3,046,181 -3 3,819 -97 1,559,860 7 5.39 102 100 Co-operators General Insurance(Dec18)ON CCS.PR.C 2,978,285 7 -37,107 -131 6,698,721 13 23.0 103 111 Secure Energy Services Inc.(Dec18)AB SES 2,937,453 26 19,929 n/m 1,583,501 1 8.15 104 94 Agnico Eagle Mines Ltd.(Dec18)ON1 AEM 2,886,658 -2 -434,540 -236 10,376,747 0 58.4 105 121 Transcontinental Inc.(Jan19)QC TCL.A 2,879,300 41 183,300 -19 3,728,300 81 17.4

106 175 Extendicare Inc.(Dec18)ON EXE 2,796,212 153 81,225 3,710 896,324 -4 7.30 107 119 Premium Brands Holdings Corp.(Sep18)BC PBH 2,766,300 29 97,100 17 2,377,500 94 73.46 108 132 Stars Group Inc.(Dec18)ON1 TSGI 2,658,043 52 -135,210 -140 14,886,282 108 22.7 109 110 Cogeco Inc.(Nov18)QC CGO 2,631,105 12 121,914 13 7,465,909 37 76.3 110 106 Superior Plus Corp.(Dec18)ON SPB 2,623,400 10 -29,400 -5 3,649,600 56 11.2

111 114 Inter Pipeline Ltd.(Dec18)AB IPL 2,588,000 15 592,500 12 11,461,500 11 21.6 112 135 Element Fleet Management(Dec18)ON EFN 2,586,219 55 -98,249 -164 18,964,006 8 7.88 113 102 CU Inc.(Dec18)AB CIU.PR.A 2,522,000 -5 345,000 -24 16,255,000 3 20.6 114 116 Cogeco Communications Inc.(Nov18)QC CCA 2,518,217 13 340,851 13 7,288,866 37 84.13 115 113 FirstService Corp.(Dec18)ON1 FSV 2,509,209 12 85,787 28 1,331,276 19 114.6

116 105 TransAlta Corp.(Dec18)AB TA 2,473,000 2 -198,000 -24 9,428,000 -9 8.12 117 109 Yamana Gold Inc.(Dec18)ON1 YRI 2,386,678 2 -367,396 -46 10,588,246 -9 3.58 118 101 Lundin Mining Corp.(Dec18)ON1 LUN 2,347,043 -15 251,758 -54 7,842,198 -6 6.2 119 118 Union Gas Ltd.(Sep18)BC UNG.PR.C 2,311,000 6 267,000 28 8,851,000 3 50.30 120 130 Uni-Select Inc.(Dec18)QC1 UNS 2,273,735 21 47,018 -18 2,035,709 3 12.61

121 117 Leon’s Furniture Ltd.(Dec18)ON LNF 2,249,823 2 111,030 15 1,723,572 4 14.4 122 128 Tourmaline Oil Corp.(Dec18)AB TOU 2,236,451 14 401,418 16 10,732,457 5 20.4 123 120 CI Financial Corp.(Dec18)ON CIX 2,236,365 6 617,476 12 4,292,216 -1 18.0 124 143 Calfrac Well Services Ltd.(Dec18)AB CFW 2,229,451 47 -118,188 -2,090 1,782,657 0 3.2 125 126 Interfor Corp.(Dec18)BC IFP 2,180,327 10 111,678 15 1,529,504 13 15.5

126 123 Algonquin Power & Utilities(Dec18)ON1 AQN 2,172,939 0 240,976 18 12,406,582 12 14.90 127 122 Spin Master Corp.(Dec18)ON1 TOY 2,165,809 6 202,467 -4 1,381,388 11 38.3 128 124 HudBay Minerals Inc.(Dec18)ON1 HBM 2,099,663 5 109,597 -39 6,191,598 -1 8.8 129 115 Cameco Corp.(Dec18)SK CCO 2,098,079 -7 166,322 n/m 8,018,636 3 15.6 130 131 Stella-Jones Inc.(Sep18)QC SJ 2,069,846 12 168,138 24 2,010,160 12 41.13

131 138 Frontera Energy Corp.(Sep18)ON1 FEC 1,980,857 27 -224,247 -105 3,390,307 1 11.90 132 127 North West Co.(Oct18)MB NWC 1,970,778 0 91,081 36 1,061,537 11 32.5 133 125 Pivot Technology Solutions Inc.(Sep18)ON1 PTG 1,890,589 -3 -10,327 -905 546,569 -13 1.2 134 134 Laurentian Bank of Canada(Jan19)QC LB 1,842,720 10 205,155 -6 45,120,134 -5 40.5 135 165 Vermilion Energy Inc.(Dec18)AB VET 1,814,680 53 273,189 339 6,270,671 58 33.7

136 144 Boyd Group Income Fund(Sep18)MB BYD.UN 1,776,756 17 70,902 62 1,054,918 12 124.7 137 137 ARC Resources Ltd.(Dec18)AB ARX 1,710,800 6 213,800 -45 6,016,200 -3 9.30 138 139 Enerflex Ltd.(Dec18)AB EFX 1,709,988 8 101,093 4 2,482,859 17 19.20 139 149 Northland Power Inc.(Dec18)ON NPI 1,696,456 20 278,130 73 10,335,950 1 25.38 140 133 Corus Entertainment Inc.(Nov18)ON CJR.B 1,669,400 -1 -801,767 -505 4,982,389 -18 5.8

141 161 Enerplus Corp.(Dec18)AB ERF 1,649,105 30 378,279 60 3,043,637 15 11.0 142 136 SunOpta Inc.(Dec18)ON1 SOY 1,635,161 -1 -143,894 19 1,184,950 -9 4.7 143 142 Cineplex Inc.(Dec18)ON CGX 1,618,730 4 77,053 9 1,856,449 0 24.40 144 151 Turquoise Hill Resources(Sep18)BC1 TRQ 1,601,856 15 464,320 62 17,360,219 4 2.12 145 148 Chemtrade Logistics IF(Dec18)ON CHE.UN 1,597,895 9 -131,517 -189 2,877,088 -4 9.2

146 179 Whitecap Resources Inc.(Dec18)AB WCP 1,582,520 49 65,128 n/m 5,958,964 0 4.2 147 145 Lassonde Industries Inc.(Sep18)QC LAS.A 1,569,850 4 87,805 18 1,287,175 22 180.13 148 156 Precision Drilling Corp.(Dec18)AB PD 1,563,457 18 -294,270 -123 3,636,043 -7 3.10 149 160 Ritchie Bros. Auctioneers(Dec18)BC1 RBA 1,539,476 21 157,974 62 2,712,036 2 45.3 150 129 AGT Food and Ingredients Inc.(Sep18)SK AGT 1,537,687 -20 -53,162 -60 1,077,791 -5 17.7

52 MAY 2019 / REPORT ON BUSINESS STOCK MARKET PRICE- PRICE-TO- PRICE-TO- DIVIDEND RETURN ON RETURN ON DEBT-TO- INDUSTRYBUY RATING $ PRICE CAP $000 TO-SALES EARNINGS CA101-150SH FLOW YIELD % EQUITY % CAPITAL % EQUITY OUT OF 5

7 5.39 202,369 0.1 53.9 2.9 0.0 0.6 0.0 0.1 trans 13 23.02 495,015 0.2 -10.6 2.2 0.0 -3.4 2.9 0.0 insur n/r 1 8.15 1,298,084 0.4 67.9 7.0 3.3 2.3 4.5 0.5 oilserv 0 58.48 13,744,292 4.7 -31.6 17.1 1.0 -6.9 -2.6 0.4 mining 81 17.43 1,522,343 0.5 7.9 5.0 4.8 12.7 12.8 0.9 pub

-4 7.30 645,977 0.2 20.3 16.3 6.6 63.7 25.7 4.2 other 94 73.46 2,475,602 0.9 24.1 20.7 2.5 15.6 10.8 1.4 food 108 22.75 6,214,782 2.3 -29.2 8.4 0.0 -3.2 1.3 1.3 tech 37 76.32 1,253,482 0.5 10.2 1.5 2.1 5.8 5.8 1.6 bcast 56 11.27 1,971,123 0.7 -86.7 6.8 6.6 -3.2 2.4 1.7 whole

11 21.67 8,750,346 3.3 14.2 7.8 6.5 16.0 10.4 1.4 pipe 8 7.88 3,413,651 1.3 -19.2 -12.6 3.4 -4.5 2.5 3.6 fin 3 20.64 118,857 0.0 n/m 0.1 281.8 7.5 6.7 1.7 util n/r 37 84.13 4,154,023 1.6 12.2 5.2 2.3 16.8 9.8 1.7 bcast 19 114.64 4,124,753 1.6 47.4 31.4 0.6 18.9 13.9 0.9 dev

-9 8.12 2,310,952 0.9 -9.6 2.8 2.0 -7.5 -0.2 0.8 util -9 3.58 3,398,644 1.4 -9.0 6.4 0.7 -6.7 -1.5 0.4 pmetals -6 6.24 4,577,258 1.9 17.5 7.3 2.5 4.7 8.0 0.0 mining 3 50.30 2,908,479 1.3 n/m 3.1 0.0 12.9 7.7 1.5 util n/r 3 12.61 534,504 0.2 11.1 4.3 3.9 7.0 6.7 0.8 whole

4 14.48 1,122,068 0.5 10.1 6.2 3.6 13.6 15.3 0.2 retail 5 20.47 5,568,713 2.5 13.9 4.4 1.8 5.4 7.0 0.2 oilprd -1 18.05 4,399,164 2.0 7.6 7.2 10.8 37.0 29.3 1.0 fin 0 3.23 468,773 0.2 -23.1 2.5 0.0 -22.4 -1.1 1.9 oilserv 13 15.53 1,052,322 0.5 9.7 4.2 0.0 12.2 13.7 0.3 forest

12 14.90 7,283,886 3.2 29.7 10.2 4.4 5.0 5.6 0.8 util 11 38.37 3,905,663 1.8 19.1 15.3 0.0 26.6 34.7 0.0 consumer -1 8.87 2,317,484 1.1 20.3 3.7 0.3 4.0 7.3 0.5 mining 3 15.63 6,186,240 2.9 37.2 9.3 0.5 3.4 1.8 0.3 mining 12 41.13 2,852,941 1.4 17.0 25.2 1.1 14.6 12.5 0.4 indust

1 11.90 1,186,475 0.6 -4.3 1.8 0.0 -12.8 -9.3 0.3 oilprd 11 32.53 1,584,146 0.8 17.4 11.7 3.9 22.6 17.6 0.9 retail -13 1.29 50,918 0.0 -5.2 0.8 16.3 -53.7 8.2 14.1 tech n/r -5 40.52 1,709,539 0.9 8.8 -7.2 6.3 8.7 16.6 0.1 banks 58 33.77 5,156,814 2.8 17.1 6.4 8.0 12.5 11.3 0.7 oilprd

12 124.73 2,453,612 1.4 34.1 15.1 0.4 17.0 13.3 0.5 other n/r -3 9.30 3,287,020 1.9 15.2 3.8 6.5 5.8 8.0 0.2 oilprd 17 19.20 1,710,406 1.0 16.8 7.0 2.0 8.4 8.5 0.3 oilserv 1 25.38 4,573,520 2.7 16.9 4.1 4.7 21.5 7.6 4.9 util -18 5.83 1,235,943 0.7 -1.5 3.7 15.7 -36.8 -14.0 1.1 ent

15 11.05 2,645,492 1.6 7.2 3.7 1.1 22.5 22.1 0.4 oilprd -9 4.72 412,638 0.2 -2.7 -27.9 0.0 -62.4 -12.0 2.4 indust 0 24.40 1,545,331 1.0 20.2 7.4 7.0 11.1 10.0 0.9 ent 4 2.12 4,266,107 2.6 8.5 29.4 0.0 4.4 2.2 0.5 pmetals n/r -4 9.28 859,291 0.5 -6.5 3.5 14.0 -12.1 -4.9 1.2 chem n/r

0 4.29 1,776,330 1.1 26.8 2.4 7.3 2.0 3.2 0.4 oilprd 22 180.13 1,258,734 0.8 14.3 12.6 1.6 13.8 12.7 0.5 food -7 3.10 910,724 0.6 -3.1 3.1 0.0 -17.5 -5.9 1.1 oilserv 2 45.37 4,930,904 3.1 30.9 25.9 2.0 15.3 12.5 0.9 retail -5 17.79 431,168 0.3 -8.1 2,711.7 3.4 -29.3 -6.0 2.4 agri n/r

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MAY 2019 / REPORT ON BUSINESS 53 THETOP 1000

REVENUE COMPANY AND YEAR-END STOCK REVENUE REVENUE PROFIT PROFIT ASSETS ASSETS STOCK RANK RANK TICKER $000 1-YEAR $000 1-YEAR $000 1-YEAR $ PRICE 2018 2017 % CHANGE % CHANGE % CHANGE

151 166 Capital Power Corp.(Dec18)AB CPX 1,504,000 28 274,000 90 7,660,000 11 30.68 152 167 Baytex Energy Corp.(Dec18)AB BTE 1,496,481 28 -325,309 -473 6,377,198 46 2.2 153 201 B2Gold Corp.(Sep18)BC1 BTO 1,487,974 71 150,210 255 3,738,607 10 4.2 154 140 Centerra Gold Inc.(Dec18)ON1 CG 1,486,428 -5 140,209 -49 3,735,216 2 6.9 155 162 Wajax Corp.(Sep18)ON WJX 1,469,478 17 40,407 28 790,841 19 18.6

156 147 Iamgold Corp.(Dec18)ON1 IMG 1,467,474 0 -38,783 -106 5,234,065 0 4.8 157 150 Chorus Aviation Inc.(Dec18)NS CHR 1,465,838 3 66,988 -60 2,316,025 14 7.39 158 152 Taiga Building Products Ltd.(Dec18)BC TBL 1,451,386 4 20,267 n/m 326,001 20 1.08 159 203 Shopify Inc.(Dec18)ON1 SHOP 1,433,072 61 -83,480 -61 2,979,473 102 254.36 160 141 ShawCor Ltd.(Dec18)ON SCL 1,426,113 -9 29,863 -58 1,702,125 0 21.9

161 159 Aimia Inc.(Sep18)QC AIM 1,406,700 9 -160,500 -42 3,507,000 -18 3.7 162 164 Canfor Pulp Products(Dec18)BC CFX 1,387,000 16 184,400 81 932,000 4 16.20 163 146 Bird Construction(Sep18)ON BDT 1,376,143 -7 -2,658 -121 648,377 -11 6.6 164 158 Morguard Corp.(Dec18)ON MRC 1,370,101 6 319,851 3 11,082,758 10 189.9 165 153 High Liner Foods Inc.(Dec18)NS1 HLF 1,366,151 0 21,453 -47 1,105,366 -8 7.6

166 171 Canadian Western Bank(Jan19)AB CWB 1,357,285 19 268,076 11 29,348,618 5 29.0 167 112 BlackBerry Ltd.(Nov18)ON1 BB 1,341,969 -39 43,419 -91 4,809,065 -7 12.3 168 163 Cervus Equipment Corp.(Sep18)AB CERV 1,319,590 7 25,276 1 549,719 7 13.00 169 170 Intertape Polymer Group(Sep18)FL1 ITP 1,298,430 16 76,790 -7 1,256,856 32 18.1 170 214 Parex Resources Inc.(Dec18)AB1 PXT 1,295,545 66 521,896 160 2,282,021 54 20.36

171 172 CanWel Building Materials Group(Dec18)BC CWX 1,292,206 14 30,015 4 803,769 11 4.8 172 202 Choice Properties REIT(Dec18)ON CHP.UN 1,275,618 44 649,577 61 15,549,215 57 13.61 173 168 Mullen Group Ltd.(Dec18)AB MTL 1,265,178 9 -43,787 -167 1,645,852 -6 11.8 174 213 Noranda Income Fund(Dec18)ON1 NIF.UN 1,233,760 57 13,705 n/m 580,328 -12 1.9 175 190 Canaccord Genuity Group(Dec18)BC CF 1,227,585 26 51,314 -4 3,998,083 21 6.18

176 236 Great Canadian Gaming Corp.(Dec18)BC GC 1,223,900 98 179,900 113 1,601,800 37 50.5 177 154 RioCan REIT(Dec18)ON REI.UN 1,219,697 -9 528,103 -26 14,003,765 -3 25.30 178 185 Exchange Income(Dec18)MB EIF 1,208,008 19 70,769 -2 1,957,298 12 32.6 179 176 ATS Automation Tooling Systems(Dec18)ON ATA 1,207,986 11 67,492 69 1,674,729 16 18.3 180 187 Kirkland Lake Gold Ltd.(Dec18)ON1 KL 1,204,590 23 361,592 110 2,259,805 15 46.88

181 206 Recipe Unlimited Corp.(Dec18)ON RECP 1,203,146 47 73,788 -33 1,591,083 18 26.8 182 157 Colabor Group(Dec18)QC GCL 1,202,916 -9 -4,387 76 297,808 -4 0.4 183 197 CES Energy Solutions(Sep18)AB CEU 1,201,170 28 34,949 18 1,273,464 14 2.9 184 180 Pan American Silver(Sep18)BC1 PAAS 1,191,798 16 156,392 31 2,631,297 5 17.6 185 177 First National Financial(Dec18)ON FN 1,181,510 10 166,427 -20 36,037,127 10 29.3

186 174 Western Forest Products(Dec18)BC WEF 1,164,000 3 69,200 -7 855,800 7 1.8 187 169 Winpak Ltd.(Dec18)MB1 WPK 1,160,940 1 141,327 -9 1,438,923 12 41.7 188 155 H&R REIT(Dec18)ON HR.UN 1,110,472 -17 337,918 -49 14,691,009 1 23.0 189 182 Hardwoods Distribution(Sep18)BC HDI 1,107,362 7 31,225 -1 446,444 16 12.2 190 191 GDI Integrated Facility Services(Dec18)QC GDI 1,104,125 14 12,701 18 580,234 17 23.9

191 188 Ensign Energy Services(Sep18)AB ESI 1,103,562 13 -49,682 66 2,762,789 -7 5.3 192 173 Wheaton Precious Metals(Sep18)BC1 WPM 1,082,263 -2 366,505 37 8,646,783 11 29.6 193 107 E-L Financial Corp.(Dec18)ON ELF 1,076,692 -55 31,101 -95 21,347,435 -6 815.00 194 178 Indigo Books & Music(Dec18)ON IDG 1,067,602 -1 -23,794 -200 733,969 0 10.40 195 231 Paramount Resources Ltd.(Dec18)AB POU 1,045,788 60 -367,163 -209 4,118,103 -8 7.41

196 181 Trilogy International Partners(Sep18)WA1 TRL 1,032,019 2 -20,704 -3 937,943 -4 2.21 197 189 Rocky Mountain Dealerships(Sep18)AB RME 1,029,421 5 19,421 0 636,101 18 8.70 198 199 Sierra Wireless(Dec18)BC1 SW 1,029,033 14 -31,694 -645 903,727 -2 16.88 199 220 TMX Group Ltd.(Dec18)ON X 1,023,700 37 286,000 -22 31,657,900 24 81.9 200 226 Step Energy Services(Dec18)AB1 STEP 1,022,175 42 -52,857 -168 1,173,282 66 1.7

54 MAY 2019 / REPORT ON BUSINESS STOCK MARKET PRICE- PRICE-TO- PRICE-TO- DIVIDEND RETURN ON RETURN ON DEBT-TO- INDUSTRYBUY RATING $ PRICE CAP $000 TO-SALES EARNINGS 15CASH FLOW YIELD % 1-200EQUITY % CAPITAL % EQUITY OUT OF 5

11 30.68 3,125,452 2.1 13.6 7.0 5.6 10.2 7.3 0.9 util 46 2.26 1,252,176 0.8 -2.2 2.6 0.0 -13.1 -7.3 0.7 oilprd n/r 10 4.23 4,186,047 2.8 26.8 7.9 0.0 7.3 11.4 0.4 pmetals 2 6.99 2,040,652 1.4 14.3 7.1 0.0 5.2 5.1 0.1 pmetals 19 18.62 372,120 0.3 9.0 -16.9 5.4 13.7 14.6 0.6 whole

0 4.85 2,263,980 1.5 -61.2 9.0 0.0 -1.0 0.4 0.1 pmetals 14 7.39 1,031,382 0.7 15.4 4.3 6.5 18.9 10.6 2.9 trans 20 1.08 124,809 0.1 6.4 3.6 0.0 18.9 16.8 1.1 whole n/r 102 254.36 28,079,484 18.8 -310.5 2,224.2 0.0 -4.2 -4.2 0.0 tech 0 21.98 1,540,547 1.1 52.3 52.6 2.7 2.8 3.9 0.3 oilserv

-18 3.76 572,675 0.4 -3.1 2.4 0.0 165.2 -24.0 -1.8 other n/r 4 16.20 1,057,062 0.8 5.7 4.9 1.6 31.6 44.0 0.0 forest -11 6.62 281,462 0.2 73.6 5.7 5.8 -1.8 0.2 0.2 eng 10 189.95 2,145,295 1.6 6.8 7.4 0.3 7.8 4.2 1.3 dev -8 7.67 256,051 0.2 11.6 3.4 10.0 6.3 6.9 1.4 food

5 29.05 2,533,455 1.9 10.2 -3.0 3.5 11.0 8.9 0.7 banks -7 12.32 6,740,080 4.9 157.0 -63.6 0.0 1.3 1.0 0.3 tech 7 13.00 203,840 0.2 8.0 24.1 2.6 10.9 11.6 0.2 consumer 32 18.14 1,066,948 0.8 13.7 10.1 4.1 23.4 11.6 1.9 paper 54 20.36 3,156,083 2.4 5.9 4.5 0.0 37.3 48.1 0.0 oilprd

11 4.84 376,284 0.3 12.4 -93.4 11.6 8.3 8.2 0.8 whole 57 13.61 3,786,337 3.0 n/m 5.5 5.4 29.3 8.2 0.9 trust n/r -6 11.82 1,239,031 1.0 -27.5 8.8 3.3 -4.6 -0.3 0.6 trans -12 1.99 99,480 0.1 n/m -10.1 0.0 6.8 6.5 1.2 mining n/r 21 6.18 594,879 0.5 14.4 1.6 2.4 6.9 8.9 0.2 fin

37 50.59 2,941,505 2.5 20.3 7.2 0.0 32.9 22.6 1.0 ent -3 25.30 7,718,954 6.4 15.1 19.2 6.2 6.7 3.8 0.8 dev n/r 12 32.65 1,022,468 0.9 14.5 6.2 6.7 11.8 9.3 1.6 trans 16 18.33 1,707,622 1.4 25.5 14.2 0.0 8.8 10.5 0.4 indust 15 46.88 9,836,502 8.0 26.9 13.7 0.3 22.9 32.3 0.0 pmetals

18 26.82 1,656,269 1.4 22.4 8.4 1.6 13.5 11.7 1.3 retail -4 0.48 48,565 0.0 -12.0 2.6 0.0 -4.6 0.8 1.2 whole n/r 14 2.95 789,984 0.7 22.7 9.1 6.0 5.7 5.7 0.7 oilserv 5 17.62 2,701,457 2.2 16.6 9.3 1.0 8.1 11.5 0.0 pmetals 10 29.37 1,761,243 1.5 10.8 -5.7 9.8 37.8 3.1 59.9 fin

7 1.85 709,920 0.6 10.3 6.1 4.6 12.2 16.8 0.0 forest n/r 12 41.74 2,713,100 2.3 18.8 15.8 0.4 12.2 17.0 0.0 paper 1 23.02 6,576,303 5.9 n/m 14.2 6.0 4.7 2.8 0.9 dev n/r 16 12.24 262,738 0.2 8.4 -116.6 2.4 12.5 12.9 0.5 whole 17 23.98 509,263 0.5 40.0 37.2 0.0 5.3 7.0 0.6 bio

-7 5.35 839,334 0.8 -17.3 6.5 9.0 -3.1 -7.0 0.5 oilserv 11 29.62 13,150,066 11.9 35.3 18.7 1.6 5.5 5.0 0.3 pmetals -6 815.00 3,275,818 3.0 205.8 8.5 0.6 0.2 1.2 0.1 insur 0 10.40 282,217 0.3 -11.8 16.1 0.0 -5.9 -8.0 0.0 retail -8 7.41 965,716 0.9 -2.7 4.3 0.0 -14.9 -16.3 0.4 oilprd

-4 2.21 123,027 0.1 -6.3 1.4 1.2 139.5 7.0 -15.9 other n/r 18 8.70 173,026 0.2 8.8 9.7 5.4 9.9 16.7 0.2 indust -2 16.88 606,799 0.6 -18.5 9.8 0.0 -5.4 -5.2 0.0 tech 24 81.92 4,570,362 4.5 15.9 13.1 2.7 8.7 12.5 0.3 other 66 1.76 117,361 0.1 -2.3 0.8 0.0 -8.6 -4.5 0.6 oilserv n/r

Please visit tgam.ca/top1000 for the rest of the Top 1000 ranking

MAY 2019 / REPORT ON BUSINESS 55 TOP 100 PRIVATE COMPANIES Companies that do not issue publicly traded shares in Canada are a huge part of the economy. Many are subsidiaries of multinationals, or are family-owned or co-ops. We rank them by revenue, the one significant financial measure they all disclose

REVENUE COMPANY & YEAR-END GROUP 2018 REVENUE RETURN ON 2018 PROFIT ASSETS MAJOR SHAREHOLDER(S) REVENUE RANK $000 CAPITAL % $000 $000 R

1 Wal-Mart Canada(Ja18)1 retail 35,001,222 n/a n/a n/a Wal-Mart Stores (U.S.) 100% 2 Costco Wholesale Canada(Se18)1 retail 26,142,786 n/a n/a 5,437,305 Costco Wholesale (U.S.) 100% 3 Desjardins Group(De18) fin 19,737,000 n/a n/a n/a Members 100% 4 McKesson Canada(Ma18)1 whole 19,327,218 n/a n/a n/a McKesson Corp. (U.S.) 100% 5 Honda Canada(Ma18) auto 17,480,000 n/a n/a n/a Honda (Japan) 50.2%, Honda (U.S.) 49.8%

6 Rio Tinto Alcan Inc.(De18)1 mining 15,800,548 n/a 1,745,824 n/a Rio Tinto Group (U.K., Australia) 100% 7 FCA Canada Inc.(De18)1 auto 15,762,961 n/a n/a n/a Chrysler Group LLC (U.S.) 100% 8 Ford Motor Co. of Canada(De18)1 auto 13,662,011 n/a n/a n/a Ford Motor (U.S.) 100% 9 James Richardson & Sons(De18) whole 12,137,748 n/a n/a n/a Richardson family 100% 10 General Motors of Canada(De18) auto 11,007,000 n/a n/a n/a General Motors (U.S.) 100%

11 Federated Co-operatives(Oc18) retail 10,647,000 n/a n/a n/a Retail co-operatives in Western Canada 100% 12 Jim Pattison Group(De18) mgt 10,600,000 n/a n/a n/a Jim Pattison 100% 13 Home Depot of Canada(Fe19)1 retail 9,813,998 n/a n/a n/a Home Depot (U.S.) 100% 14 McCain Foods(Ju18) food 9,505,013 n/a n/a n/a McCain family 100% 15 Ultramar Ltd.(De18)1 oil 9,211,000 n/a n/a 1,798,000 Valero Energy Corp. (U.S.) 100%

16 PCL Construction Holdings(Oc18) eng 9,000,000 n/a n/a n/a Employees 100% 17 Apple Canada(Se18) tech 8,036,798 n/a n/a n/a Apple Inc. (U.S.) 100% 18 Agropur Cooperative(No18) food 6,714,167 n/a n/a n/a Members 100% 19 La Coop fédérée(Oc18) food 6,581,038 n/a n/a n/a Members 100% 20 Toyota Motor Manufact. Canada(De17) whole 6,476,841 n/a n/a n/a Toyota (Japan) 50%, Mitsui (Japan) 50%

21 IBM Canada(De18) tech 6,415,000 n/a n/a n/a IBM Corp. (U.S.) 100% 22 Vale Canada(De17) mining 6,051,948 n/a n/a 29,643,009 Vale SA (Brazil) 100% 23 Home Hardware Stores(De17) retail 6,000,000 n/a n/a n/a Dealer-owned 100% 24 Dow Chemical Canada(De18) chem 5,290,000 n/a n/a n/a Dow Chemical Co. (U.S.) 100% 25 Aviva Canada(De18) p&c 5,248,201 7.3 98,467 11,719,168 Aviva Insurance Ltd. (U.K.) 100%

26 Nova Chemicals(De17)1 chem 4,989,221 2.3 167,432 11,391,881 International Petroleum Investment Co. 100% 27 ArcelorMittal Dofasco(De18)1 steel 4,617,944 n/a n/a n/a ArcelorMittal SA (Luxembourg) 100% 28 Best Buy Canada(Fe18)1 retail 4,102,361 n/a n/a n/a Best Buy Co. Inc. (U.S.) 100% 29 Hyundai Auto Canada(De18) auto 4,000,000 n/a n/a n/a Hyundai Motor America 100% 30 Co-operators Group(De18) ins 3,983,334 n/a n/a n/a Member organizations 100%

31 Randstad Canada(De18) serv 3,674,665 n/a n/a n/a F.J.D. Goldschmeding 30% 32 Siemens Canada(Se18) tech 3,500,000 n/a n/a n/a Siemens AG (Germany) 100% 33 HSBC Bank Canada(De18) bks 3,482,000 31.7 718,000 103,406,000 HSBC Holdings PLC (U.K.) 100% 34 Lloyd's Underwriters (Canada)(De17) p&c 3,394,104 11.7 356,698 11,301,578 Lloyd's underwriters (U.K.) 100% 35 Wawanesa Mutual Insurance Co.(De17) p&c 3,365,310 7.1 200,658 8,196,235 Policyholders 100%

36 John Deere Ltd.(Oc18)1 whole 3,249,632 n/a n/a n/a Deere & Co. (U.S.) 100% 37 Ivanhoe Cambridge(De17) dev 3,200,000 n/a n/a 60,300,000 Caisse de dépôt (QC) 93.7 % 38 Parmalat Canada(De17) food 2,881,816 n/a n/a n/a Parmalat S.p.A. (Italy) 100% 39 Masonite Canada Corp.(De18)1 cons 2,815,917 11.2 120,160 2,305,038 Kohlberg Kravis Roberts & Co. (U.S.) 100% 40 Garda World Security(Ja18) cons 2,741,909 10.6 -134,973 2,118,485 Crepax Acquisition 100%

41 Nestlé Canada(De18) food 2,734,000 n/a n/a n/a Nestlé SA (Switzerland) 100% 42 Énergir(Se18) util 2,712,382 6.5 101,385 8,142,903 Noverco 100% 43 Compass Group Canada(Se18) serv 2,700,000 n/a n/a n/a Compass Group (U.K.) 100% 44 3M Canada(De18) cons 2,600,000 n/a n/a n/a 3M Co. (U.S.) 100% 45 Ledcor Group of Cos.(Au17) eng 2,500,000 n/a n/a n/a Employees 100%

46 Capitale Civil Service Mutual(De17) ins 2,455,622 7.3 62,538 7,125,341 Policyholders 100% 47 Economical Mutual Insurance(De17) p&c 2,321,488 -7.9 -92,678 5,629,807 Policyholders 100% 48 SSQ, Life Insurance Co.(De17) ins 2,310,500 12.1 90,400 12,077,500 Fonds de solidarité FTQ and two others 49 Sony of Canada(Ma18) whole 2,250,000 n/a n/a n/a Sony Corp. (Japan) 100% 50 Direct Energy Marketing Ltd.(De17) util 2,209,000 n/a n/a n/a Centrica PLC (U.K.) 100%

Industry groups auto = automotive, banks = banks, bcast = broadcasting, bevg = beverages, bio = biotech & pharmaceuticals, cement = cement, chem = chemicals, consumer = consumer products, dev = real estate developers, eng = engineering & construction, ent = entertainment, env = environmental services, fin = financial services, food = food production or distribution, forest = forest products, homefurn = home furniture & appliances, indust = industrial products, insur = life insurance, media = media, metal = metal fabrication, mgt = management companies, mining = mining, oil = integrated oils, oilprd = oil & gas production, oilserv = oil & gas field services, other = other, p&c = property & casualty insurance, paper = paper products & packaging, pipe = pipelines, pmetals = precious metals,

56 MAY 2019 / REPORT ON BUSINESS REVENUE COMPANY & YEAR-END GROUP 2018 REVENUE RETURN ON 2018 PROFIT ASSETS MAJOR SHAREHOLDER(S) RANK $000 CAPITAL % $000 100$000

51 Ikea Canada LP(Au17) retail 2,140,220 n/a n/a n/a Ikea Properties Ltd. 52 UAP Inc.(De18)1 whole 2,105,992 n/a n/a n/a Genuine Parts (U.S.) 100% 53 Iron Ore Co. of Canada(De18)1 steel 2,023,186 9.6 228,111 3,674,395 Rio Tinto 58.7%, Mitsubishi Corp. 26.2% 54 Independent Order of Foresters(De17) ins 1,994,351 4.1 38,077 17,683,559 Members 100% 55 PPG Canada(De18)1 chem 1,980,415 n/a n/a n/a PPG Industries (U.S.) 100%

56 Univar Canada(De18) whole 1,713,000 n/a n/a n/a Univar Inc. (U.S.) 100% 57 BASF Canada(De18) chem 1,707,890 n/a n/a n/a BASF SE (Germany) 100% 58 Travelers Canada(De18) p&c 1,675,303 0.2 3,517 5,124,422 The Travelers Cos. Inc. 100% 59 Allstate Insurance Co. of Can.(De17) p&c 1,633,128 35.4 220,280 3,730,809 Allstate Corp. (U.S.) 100% 60 Pomerleau(De17) eng 1,631,000 n/a n/a n/a P. Pomerleau, F. Pomerleau 50% each

61 Purolator Courier(De17) serv 1,630,000 23.1 88,000 918,000 Canada Post 94%, Barry Lapointe 4.9% 62 United Farmers of Alberta Co-op(De17) food 1,541,753 n/a n/a n/a Members 100% 63 Wolseley Canada(Jl18) whole 1,491,289 n/a n/a n/a Ferguson PLC (Jersey) 100% 64 ABB Inc.(De18) tech 1,470,000 n/a n/a n/a Asea Brown Boveri Ltd. (Switz.) 100% 65 Capital One Bank (Canada)(De17) banks 1,464,538 n/a 215,990 8,076,959 Capital One Financial (U.S.) 100%

66 Novelis Inc.(Ma18) metal 1,464,397 18.7 449,202 3,213,716 Hindalco Industries (India) 100% 67 Groupe Deschenes(De18) whole 1,463,000 n/a n/a n/a Deschenes family 100% 68 Oracle Corp. Canada(My18)1 tech 1,453,239 n/a n/a n/a Oracle Corp. (U.S.) 100% 69 Ford Credit Canada(De18)1 fin 1,416,619 n/a n/a n/a Ford Motor (U.S.) 100% 70 407 International(De18) serv 1,410,900 24.2 539,000 5,261,100 Cintra 43%, CPPIB 40%, SNC-Lavalin 17%

71 Devon Canada(De18)1 oilprd 1,373,848 n/a -305,876 5,853,111 Devon Energy Corp. (U.S.) 100% 72 Royal & Sun Alliance Ins. Can.(De17) p&c 1,359,340 7.9 55,288 4,461,441 RSA Insurance Group (U.K.) 100% 73 NAV Canada(Au17) tran 1,339,000 19 n/a 3,916,000 n/a 74 Hatch Ltd.(Se18) eng 1,260,129 n/a n/a 865,596 Employees 100% 75 Calgary Co-operative Association food 1,241,986 n/a n/a n/a Members 100%

76 Air Liquide Canada(De18) ind 1,218,530 n/a n/a n/a Air Liquide SA (France) 100% 77 Fonds de Solidarité FTQ(My18) fin 1,206,000 6.9 1,001,000 16,284,000 Widely held 78 Unilever Canada(De18) cons 1,201,410 n/a n/a n/a Unilever PLC (U.K.)/CN Holdings 100% 79 Cardinal Health Canada(Ju18) cons 1,200,000 n/a n/a 560,000 Cardinal Health (U.S.) 100% 80 General Mills Canada(My18)1 food 1,182,425 n/a n/a n/a General Mills (U.S.) 100%

81 EBC Inc.(De18) eng 1,100,000 n/a n/a 480,000 Houle family 67% and others (QC) 33% 82 Jacobs Engineering Canada(Se18)1 eng 1,091,165 n/a n/a n/a Jacobs Engineering Group (U.S.) 100% 83 Aramark Canada(Se17) serv 1,068,000 n/a n/a n/a Aramark Corp. (U.S.) 100% 84 Ivari(De17) ins 1,041,603 4.8 65,780 12,169,006 Ivari Canada ULC (Canada) 100% 85 Solutions 2 Go(Ma17) whole 1,014,000 n/a n/a n/a Oliver Bock and Gabrielle Chevalier

86 Export Packers Co.(Ma18) whole 996,751 n/a n/a n/a Rubenstein family 100% 87 DuPont Canada(De18)1 chem 994,096 n/a n/a E.I. duPont de Nemours & Co. (U.S.) 100% 88 Equitable Life Insurance(De17) ins 968,905 20.9 106,093 4,107,583 Policyholders 100% 89 ConocoPhillips Canada Resources(De18)1 oilprd 966,878 n/a 20,737 n/a ConocoPhillips Canada (BRC) Ltd. 100% 90 Kimberly-Clark of Canada(De18)1 paper 937,068 n/a n/a n/a Kimberly-Clark Corp. (U.S.) 100%

91 Telesat Canada(De18) tech 920,173 4.4 -90,936 5,884,486 Privately held 92 RGA Life Reinsurance Co. Can.(De17) ins 911,843 3.7 33,674 8,446,284 Reinsurance Group of America Inc. (U.S.) 100% 93 General Dynamics Canada(De18)1 tech 907,258 n/a n/a n/a General Dynamics (U.S.) 100% 94 Groupe Promutuel(De179 ins 890,000 n/a n/a n/a Members 100% 95 Amex Bank of Canada(De17) banks 879,126 11.9 49,749 2,939,439 American Express (U.S.) 100%

96 Premier Tech(Ma18) mining 870,000 n/a n/a 654,000 Bernard Belanger et al 100% 97 Xerox Canada(De17) tech 869,000 n/a n/a n/a Xerox Ltd. (U.S.) 100% 98 SAP Canada(De18)8 tech 865,582 n/a 53,734 n/a SAP AG (Germany) 100% 99 Acklands-Grainger Inc.(De18)1 whole 852,823 n/a na 243,664 W.W. Grainger (U.S.) 100% 100 Optimum Group(De18) fin 849,000 n/a na 4,751,000 G. Blondeau and H. Joli-Coeur families, others pub = publishing & printing, retail = retailers, serv = services, steel = steel, tech = technology, tele = telephone utilities, textile = textiles & apparel, trans = transportation, trust = trust company, util = gas & electrical utilities, whole = wholesaler Notes All dollar figures in Canadian dollars. Foreign currencies are converted at the end of the relevant fiscal period for balance sheet items and at the average exchange rate for the relevant period for earnings items. Footnotes 1. Converted from U.S. dollars. 8. Converted from euros. 9. Revenue includes unrealized gains and losses on bonds and other assets, as required by international accounting standards. These gains and losses are often substantial for insurers and can vary widely from year to year. Abbreviations n/a = not available

MAY 2019 / REPORT ON BUSINESS 57 TOP 100 BY PROFIT Meet the most profitable companies in Canada. You might expect profits to be more volatile than revenue, and there are big changes at some companies from year to year. But most of the leaders are remarkably consistent over the long term

PROFIT COMPANY AND YEAR-END PROFIT PROFIT PROFIT COMPANY AND YEAR-END PROFIT PROFIT RANK $000 1-YEAR RANK 100$000 1-YEAR % CHANGE % CHANGE

1 Royal Bank of Canada(Jan19)ON 12,569,000 10 51 CI Financial Corp.(Dec18)ON 617,476 12 2 Toronto-Dominion Bank(Jan19)ON 11,319,000 11 52 Inter Pipeline Ltd.(Dec18)AB 592,500 12 3 Bank of Nova Scotia(Jan19)ON 8,405,000 1 53 Linamar Corp.(Dec18)ON 591,481 8 4 Bank of Montreal(Jan19)ON 5,987,000 24 54 Dream Global REIT(Dec18)ON 576,600 97 5 Thomson Reuters Corp.(Dec18)ON1 5,216,271 183 55 First Quantum Minerals(Dec18)BC1 575,479 n/m

6 CIBC(Jan19)ON 5,122,000 11 56 George Weston Ltd.(Dec18)ON 574,000 -25 7 Manulife Financial(Dec18)ON9 4,800,000 128 57 Allied Properties REIT(Dec18)ON 540,276 51 8 Nutrien Ltd.(Dec18)SK1 4,693,712 993 58 Dollarama Inc.(Oct18)QC 539,722 7 9 Brookfield Asset Management(Dec18)ON1 4,665,476 145 59 RioCan REIT(Dec18)ON 528,103 -26 10 Canadian National Railway Co.(Dec18)QC 4,328,000 -21 60 Parex Resources Inc.(Dec18)AB1 521,896 160

11 TransCanada Corp.(Dec18)AB 3,702,000 17 61 Fairfax Financial Holdings Ltd.(Dec18)ON1 510,892 -76 12 Suncor Energy(Dec18)AB 3,293,000 -26 62 Constellation Software(Dec18)ON1 494,407 71 13 Teck Resources Ltd.(Dec18)BC 3,107,000 26 63 Cott Corp.(Dec18)ON1 485,109 n/m 14 Great-West Lifeco(Dec18)MB9 3,094,000 36 64 Norbord Inc.(Dec18)ON1 478,500 -15 15 Magna International Inc.(Dec18)ON1 2,972,965 5 65 CCL Industries Inc.(Dec18)ON 466,700 -2

16 BCE Inc.(Dec18)QC 2,929,000 -2 66 Granite REIT(Dec18)ON 465,156 30 17 Enbridge Inc.(Dec18)AB 2,882,000 1 67 Turquoise Hill Resources(Sep18)BC1 464,320 62 18 Sun Life Financial(Dec18)ON9 2,616,000 17 68 Gildan Activewear(Dec18)QC1 456,097 -3 19 Canadian Natural Resources(Dec18)AB 2,591,000 8 69 Genworth MI Canada Inc.(Dec18)ON 451,551 -14 20 Alimentation Couche-Tard(Oct18)QC1 2,409,524 32 70 Seven Generations Energy Ltd.(Dec18)AB 439,900 -22

21 Imperial Oil(Dec18)AB 2,314,000 372 71 Tourmaline Oil Corp.(Dec18)AB 401,418 16 22 National Bank of Canada(Jan19)QC 2,154,000 8 72 Keyera Corp.(Dec18)AB 394,224 36 23 Power Financial Corp.(Sep18)QC 2,130,000 -5 73 Enerplus Corp.(Dec18)AB 378,279 60 24 Rogers Communications(Dec18)ON 2,059,000 12 74 Wheaton Precious Metals(Sep18)BC1 366,505 37 25 Canadian Pacific Railway Ltd.(Dec18)AB 1,951,000 -19 75 Kirkland Lake Gold Ltd.(Dec18)ON1 361,592 110

26 Telus Corp.(Dec18)BC 1,600,000 3 76 Canfor Corp.(Dec18)BC 354,900 3 27 Advanz Pharma(Sep18)ON1 1,484,847 n/m 77 SmartCentres REIT(Dec18)ON 350,818 18 28 Husky Energy Inc.(Dec18)AB 1,457,000 85 78 Quebecor Inc.(Sep18)QC 350,300 -21 29 Encana Corp.(Dec18)AB1 1,408,269 29 79 CU Inc.(Dec18)AB 345,000 -24 30 Power Corp. of Canada(Sep18)QC 1,355,000 -16 80 First Capital Realty Inc.(Dec18)ON 343,606 -46

31 Pembina Pipeline Corp.(Dec18)AB 1,278,000 45 81 Cogeco Communications(Nov18)QC 340,851 13 32 CAP REIT(Dec18)ON 1,217,671 46 82 Open Text Corp.(Dec18)ON1 339,746 38 33 CGI Inc.(Dec18)QC 1,167,611 12 83 H&R REIT(Dec18)ON 337,918 -49 34 Fortis Inc.(Dec18)NL 1,166,000 13 84 Empire Co.(Nov18)NS 328,500 263 35 West Fraser Timber Co.(Dec18)BC 810,000 36 85 Atco Ltd.(Dec18)AB 328,000 50

36 Hydro One Ltd.(Dec18)ON 796,000 18 86 Morguard Corp.(Dec18)ON 319,851 3 37 Restaurant Brands Int’l(Dec18)ON1 793,336 -6 87 CAE Inc.(Dec18)QC 307,800 -6 38 IGM Financial Inc.(Dec18)MB 776,168 27 88 Bombardier Inc.(Dec18)QC1 301,416 n/m 39 Loblaw Cos. Ltd.(Dec18)ON 766,000 -50 89 TFI International(Dec18)ON 291,994 85 40 Saputo Inc.(Dec18)QC 761,100 -14 90 Northview Apartment REIT(Dec18)AB 289,541 36

41 Emera Inc.(Dec18)NS 746,000 154 91 TMX Group Ltd.(Dec18)ON 286,000 -22 42 Methanex Corp.(Dec18)BC1 737,856 80 92 Tricon Capital Group(Dec18)ON1 278,236 212 43 Waste Connections(Dec18)ON1 710,098 -5 93 Northland Power(Dec18)ON 278,130 73 44 Intact Financial Corp.(Dec18)ON 707,000 -2 94 Franco-Nevada Corp.(Sep18)ON1 274,627 46 45 Canadian Tire Corp.(Dec18)ON 692,100 -6 95 Capital Power Corp.(Dec18)AB 274,000 90

46 Choice Properties REIT(Dec18)ON 649,577 61 96 Vermilion Energy(Dec18)AB 273,189 339 47 Canadian Utilities Ltd.(Dec18)AB 634,000 23 97 Canadian Western Bank(Jan19)AB 268,076 11 48 Industrial Alliance Insurance(Dec18)QC 634,000 19 98 Union Gas Ltd.(Sep18)BC 267,000 28 49 Westcoast Energy Inc.(Dec18)AB 622,000 n/m 99 BRP Inc.(Oct18)QC 259,500 -15 50 Metro Inc.(Dec18)QC 621,100 -65 100 Toromont Industries Ltd.(Dec18)ON 251,984 43

Footnotes All profits are in Canadian dollars. 1. Coverted from U.S. dollars. 9. Revenue includes unrealized gains and losses on bonds and other assets, as required by international accounting standards. These gains and losses are often substantial for insurers and can vary widely from year to year.

58 MAY 2019 / REPORT ON BUSINESS TOP 100 BY RETURN ON EQUITY Return on common equity (ROCE) tells you how much profit a company is generating for each dollar that shareholders have invested in the business. The average ROCE over five years reduces the impact of a stellar year or a lousy one

ROCE COMPANY AND YEAR-END ROCE ROCE ROCE COMPANY AND YEAR-END ROCE ROCE RANK 1-YEAR 5-YEAR RANK 1001-YEAR 5-YEAR % CHANGE AVG % % CHANGE AVG %

1 Anfield Energy Inc.(Sep18) 1,357.7 220.2 51 Canfor Pulp Products(Dec18) 31.6 20.8 2 Integrity Gaming(Sep18) 663.2 108.0 52 Sylogist Inc.(Dec18) 30.7 13.3 3 Mogo Finance Technology Inc.(Sep18) 609.8 9.5 53 Canadian Pacific Railway Ltd.(Dec18) 29.8 31.3 4 Smart Employee Benefits(Aug18) 575.3 -79.9 54 Choice Properties REIT(Dec18) 29.3 11.1 5 Neovasc Inc.(Sep18) 517.3 -111.3 55 West Fraser Timber Co.(Dec18) 28.8 17.1

6 Spectra7 Microsystems(Sep18) 470.9 -493.2 56 Unisync Corp.(Dec18) 28.5 4.7 7 Helius Medical Technologies(Sep18) 373.0 167.2 57 Keg Royalties Income Fund(Sep18) 28.1 12.8 8 Le Château(Oct18) 372.0 11.9 58 Gluskin Sheff+Associates(Dec18) 27.0 37.2 9 Onenergy(Sep18) 368.7 33.4 59 Labrador Iron Ore Royalty(Dec18) 26.7 19.0 10 Frankly Inc.(Sep18) 325.6 40.8 60 Spin Master Corp.(Dec18) 26.6 40.6

11 AEterna Zentaris(Sep18) 323.7 -858.7 61 Summit Industrial Income REIT(Dec18) 26.3 15.4 12 Temple Hotels(Dec18) 306.6 -16.3 62 Rogers Communications(Dec18) 26.3 24.4 13 Optiva Inc.(Dec18) 196.6 -159.5 63 NFI Group Inc.(Sep18) 25.3 17.6 14 Aimia(Sep18) 165.2 1.0 64 Canadian National Railway Co.(Dec18) 25.2 26.7 15 Platinum Group Metals(Nov18) 149.9 -19.7 65 Terrace Energy(Oct18) 25.0 17.4

16 Trilogy International Partners(Sep18) 139.5 -40.6 66 North American Palladium(Dec18) 24.8 -14.2 17 Largo Resources(Sep18) 136.8 16.3 67 IOU Financial(Sep18) 24.8 -9.1 18 Medicure Inc.(Sep18) 100.5 -73.8 68 Aritzia Inc.(Nov18) 24.7 -2.9 19 Noront Resources(Sep18) 89.6 37.7 69 Cipher Pharmaceuticals(Sep18) 24.2 0.9 20 Resverlogix Corp.(Oct18) 88.0 46.0 70 Richards Packaging Income Fund(Dec18) 24.0 14.3

21 Olympia Financial Group(Dec18) 74.8 50.5 71 Russel Metals(Dec18) 23.9 10.0 22 TWC Enterprises(Dec18) 66.9 15.7 72 Pollard Banknote Limited(Sep18) 23.8 23.7 23 Extendicare Inc.(Dec18) 63.7 50.3 73 European Commercial REIT(Sep18) 23.6 4.7 24 IBI Group(Dec18) 60.6 40.0 74 Gravitas Financial(Sep18) 23.6 7.8 25 Quebecor Inc.(Sep18) 59.3 24.5 75 Badger Daylighting(Sep18) 23.4 19.2

26 Themac Resources Group(Sep18) 57.3 0.3 76 Intertape Polymer Group(Sep18) 23.4 26.7 27 Robex Resources(Sep18) 54.9 10.0 77 Alimentation Couche-Tard(Oct18) 23.2 22.8 28 Constellation Software(Dec18) 51.6 48.8 78 BMTC Group(Oct18) 23.1 24.3 29 Sama Resources(Sep18) 49.7 8.3 79 Atlantic Gold(Dec18) 23.0 1.3 30 Postmedia Network Canada(Nov18) 49.5 168.6 80 Dream Global REIT(Dec18) 23.0 16.3

31 Atlatsa Resources(Sep18) 48.4 130.5 81 Kirkland Lake Gold(Dec18) 22.9 11.9 32 Allied Hotel Properties(Sep18) 48.3 66.7 82 North West Co.(Oct18) 22.6 20.5 33 Canada Goose Holdings(Dec18) 45.7 20.1 83 Enerplus Corp.(Dec18) 22.5 -2.3 34 Computer Modelling Group(Dec18) 42.0 42.9 84 Roxgold Inc.(Sep18) 22.4 0.1 35 Norbord Inc.(Dec18) 40.3 22.0 85 Ascendant Resources(Sep18) 22.0 -25.5

36 First National Financial(Dec18) 37.8 38.2 86 Nutrien Ltd.(Dec18) 21.8 4.4 37 Parex Resources(Dec18) 37.3 5.0 87 Lakeview Hotel Investment(Sep18) 21.8 11.1 38 Cott Corp.(Dec18) 37.2 5.6 88 CAP REIT(Dec18) 21.7 14.6 39 CI Financial(Dec18) 37.0 30.4 89 Hamilton Thorne(Sep18) 21.6 4.3 40 Thomson Reuters Corp.(Dec18) 36.3 18.4 90 Northland Power(Dec18) 21.5 5.5

41 ClearStream Energy Services(Sep18) 36.3 116.4 91 Westcoast Energy(Dec18) 21.2 -1.2 42 Goldstrike Resources(Sep18) 35.4 7.1 92 Sleep Country Canada Holdings(Dec18) 20.9 7.1 43 Information Services(Sep18) 34.7 21.7 93 International Petroleum(Dec18) 20.7 7.1 44 CGX Energy(Sep18) 34.0 28.3 94 Abcourt Mines(Sep18) 20.6 4.7 45 BioSyent Inc.(Sep18) 33.6 12.1 95 TerraVest Industries(Dec18) 20.6 14.7

46 Great Canadian Gaming(Dec18) 32.9 22.7 96 Toromont Industries(Dec18) 20.6 19.7 47 OrganiGram Holdings(Nov18) 32.2 3.3 97 Salazar Resources(Sep18) 20.5 -8.3 48 Methanex Corp.(Dec18) 32.0 16.4 98 Urbanfund Corp.(Sep18) 20.5 6.8 49 Uranium Participation(Nov18) 32.0 0.3 99 MTY Food Group(Nov18) 20.4 18.1 50 Evergreen Gaming(Sep18) 31.7 15.1 100 Tricon Capital Group(Dec18) 20.4 13.5

MAY 2018 / REPORT ON BUSINESS 59 TOP 10 RANKINGS BY INDUSTRY

FEDERAL CROWN CORPORATIONS PROVINCIAL CROWN CORPORATIONS

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000

1 PSP Investments(Mar18) 14,420,000 1 Caisse de dépôt et placement(Dec17) 25,782,000 2 Canada Mortgage and Housing Corp.(Dec17) 10,721,000 2 Alberta Health Services(Mar18) 14,855,843 3 Canada Post(Dec17) 8,245,000 3 Hydro-Québec(Dec18) 14,785,000 4 Canadian Commercial(Mar18) 2,413,533 4 Ontario Lottery and Gaming(Mar18) 7,739,404 5 Export Development Canada(Dec17) 2,178,000 5 Ontario Power Generation(Dec18) 6,741,000 6 Royal Canadian Mint(Dec17) 1,697,446 6 Insurance Corp. of British Columbia(Mar18) 6,693,585 7 Business Development Bank Canada(Mar18) 1,440,829 7 BC Hydro(Mar18) 6,328,000 8 Farm Credit Canada(Mar18) 1,374,565 8 Liquor Control Board of Ontario(Mar18) 6,301,369 9 Atomic Energy of Canada(Mar18) 917,762 9 British Columbia Lottery(Mar18) 3,267,132 10 Via Rail Canada(Dec17) 723,426 10 Société des alcools du Québec(Mar17) 3,122,600

FINANCIAL CO-OPERATIVES NON-FINANCIAL CO-OPERATIVES

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000 1 Desjardins Group(Dec18) 19,737,000 1 Federated Co-operatives(Oct18) 10,647,000 2 Co-operators Group(Dec18) 3,983,334 2 Agropur Cooperative(Nov18) 6,714,167 3 Groupe Promutuel(Dec17) 890,000 3 La Coop fédérée(Oct18) 6,581,038 4 Vancouver City Savings Credit Union(Dec17) 812,666 5 United Farmers of Alberta Co-op(Dec17) 1,541,753 5 Servus Credit Union(Oct18) 680,315 4 Calgary Co-operative Association(Oct17) 1,241,986 6 Coast Capital Savings Credit Union(Dec17) 564,370 6 Mountain Equipment Co-op(Feb18)3 483,312 7 Meridian Credit Union(Dec17) 558,858 8 Nutrinor Cooperative(Nov18) 468,990 8 Central 1 Credit Union(Dec18) 558,114 7 Saskatoon Co-operative Association(Jan18) 455,811 9 First West Credit Union(Dec17) 408,590 9 La Coop Purdel(Nov18) 119,272 10 Credit Union Central of Saskatchewan(Dec17) 314,108

INVESTMENT DEALERS BANKS

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000 1 RBC Capital Markets(Oct18) 8,398,000 1 Royal Bank of Canada(Oct18) 57,406,000 2 Scotia Capital(Oct18) 4,528,000 2 Toronto-Dominion Bank(Oct18) 53,017,000 3 BMO Nestbitt Burns(Oct18) 4,355,000 3 Bank of Nova Scotia(Oct18) 40,651,000 4 TD Securities(Oct18) 3,459,000 4 Bank of Montreal(Oct18) 32,175,000 5 CIBC World Markets(Oct18) 2,912,000 5 CIBC(Oct18) 25,274,000 6 National Bank Financial(Oct18) 1,743,000 6 National Bank of Canada(Oct18) 10,719,000 7 Canaccord Genuity Group(Mar18) 1,022,579 7 HSBC Bank Canada(Dec18) 3,482,000 8 Optimum Group(Dec18) 849,000 8 Laurentian Bank of Canada(Oct18) 1,828,281 9 GMP Capital(Dec18) 180,753 9 Capital One Bank (Canada)(Dec17) 1,464,538 10 Canadian Western Bank(Oct18) 1,303,663

MANAGEMENT COMPANIES LIFE INSURANCE

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000

1 Brookfield Asset Management(Dec18)1 60,819,000 1 Great-West Lifeco(Dec18)9 44,259,000 2 Power Corp. of Canada(Dec18) 48,471,000 2 Manulife Financial(Dec18)9 38,972,000 3 Onex Corp.(Dec18)1 23,803,000 3 Sun Life Financial(Dec18)9 30,836,000 4 TransCanada Corp.(Dec18) 15,013,000 4 Industrial Alliance Insurance(Dec18)9 9,939,000 5 PSP Investments(Mar18) 14,420,000 5 Desjardins Financial Security Life(Dec18)9 6,336,500 6 Jim Pattison Group(Dec18) 10,600,000 6 Capitale Civil Service Mutual(Dec18)9 2,382,865 7 Emera Inc.(Dec18) 6,678,000 7 SSQ, Life Insurance Co.(Dec17)9 2,310,500 8 Atco Ltd.(Dec18) 5,071,000 8 Independent Order of Foresters(Dec17)9 1,994,351 9 ClearStream Energy Services(Dec18) 378,720 9 RBC Life Insurance Co.(Dec18)9 1,965,865 10 TerraVest Industries(Sep18) 270,175 10 BMO Life Assurance Co.(Dec18)9 1,206,215

GAS & ELECTRICAL UTILITIES OIL & GAS PRODUCTION/INTEGRATED OILS

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000 1 Hydro-Québec(Dec18) 14,785,000 1 Suncor Energy(Dec18) 39,080,000 2 Fortis Inc.(Dec18) 8,468,000 2 Imperial Oil Ltd.(Dec18) 35,099,000 3 Ontario Power Generation(Dec18) 6,741,000 3 Husky Energy Inc.(Dec18) 23,329,000 4 BC Hydro(Mar18) 6,328,000 4 Canadian Natural Resources(Dec18) 22,522,000 5 Hydro One Ltd.(Dec18) 6,218,000 5 Cenovus Energy(Dec18) 20,320,000 6 Canadian Utilities(Dec18) 4,657,000 6 Ultramar Ltd.(Dec18)1 11,938,221 7 Just Energy Group(Mar18) 3,629,744 7 Encana Corp.(Dec18)1 7,681,884 8 Toronto Hydro Corp.(Dec18) 3,582,700 8 Gibson Energy Inc.(Dec18) 6,850,172 9 Enbridge Gas Distribution Inc.(Dec17) 3,332,000 9 Keyera Corp.(Dec18) 4,466,637 10 Énergir(Sep18) 2,712,382 10 AltaGas Ltd.(Dec18) 4,310,000 Footnotes Companies are ranked by Canadian-dollar revenue. 1. Revenue converted from U.S. dollars. 3. Figures have been annualized in the latest year. 9. Revenue includes unrealized gains and losses on bonds and other assets, as required by international accounting standards. These gains and losses are often substantial for life insurers, and can vary widely from year to year.

(continued on page 101) 60 MAY 2019 / REPORT ON BUSINESS SPECIAL EDITION ON CANADA'S LEADING CORPORATE LAWYERS MAY 2019

Lexpert Magazine’s Top 10 Deals Starting with the Gordie Howe International Bridge

CLOCKWISE: Linda Brown; McCarthy Tétrault LLP Chris Bennett; Osler, Hoskin & Harcourt LLP Brian Kelsall and Tom Barlow; Fasken Martineau DuMoulin LLP Vicky Tuquero; Windsor-Detroit Bridge Authority Mark Johnson; Blake, Cassels & Graydon LLP Greg Southam; Davies Ward Phillips & Vineberg LLP

CONTENTS

LEXPERT-RANKED CORPORATE LAWYERS

Welcome to the Lexpert® Special Edition on Canada’s Leading Corporate Lawyers. In this issue, alongside of the biographical information about Lexpert-ranked lawyers, we bring you articles on Cryptocurrency (p. 20), Cannabis (p. 32) and Insolvency (p. 26). As for our cover story, we bring you Lexpert® Magazine’s Top 10 Deals of 2018 (p. 4). This Top 10 list is based on commentary from Lexpert-ranked lawyers. The quantum of the deal is important, but not the governing factor. Lawyers tell Lexpert about the challenges they faced on particular deals — challenges that stood in the way of their clients’ goals. To be a Top 10 deal, these challenges were met, and resolved. Usually, there was compromise involved; the resulting transaction may look quite different than the initial announcement. M&A, Corporate, Tax and many other lawyers flex their skills on these Deals. And can’t wait Jean Cumming Editor-in-Chief for the next opportunity to do so again.

fortuna favet fortibus

MAY 2019 Special Edition

Editor-in-Chief Jean Cumming Product Development & Process Lead Jill Grove Art Director Brianna Freitag Cover Photography Christinne Muschi Director/Group Publisher, Media Solutions Karen Lorimer Sales Manager Paul Burton Business Development Consultants Ivan Ivanovitch Kimberlee Pascoe Account Executive Steffanie Munroe Account Manager Colleen Austin Production Editor Alina Leigh Marketing & Circulation Mohammad Ali This Lexpert Insert is published once a year by Thomson Reuters Canada Limited. One Corporate Plaza 2075 Kennedy Road Toronto, ON M1T 3V4 LEXPERT SPECIAL EDITION ON CANADA'S LEADING CORPORATE LAWYERS Tel: (416) 609-8000 Fax: (416) 609-5840 Website: www.lexpert.ca All rights reserved. Contents may not CONTENTS be reprinted without written permission. This Lexpert Insert is printed in Canada. PUBLICATION MAIL REGISTRATION p. 4 LEXPERT MAGAZINE: TOP 10 DEALS By Jean Cumming NO. 40065782. ISSN 1488-6553 Copyright© p.20 CRYPTOCURRENCY UNCERTAINTY By Julius Melnitzer Thomson Reuters Canada Limited. p.26 INSOLVENCY BECOMES CUSTOMIZED By Elizabeth Raymer All rights reserved. G.S.T. Registration # 897176350RT000 p.32 CANNABIS BUSINESS GROWTH AHEAD By Elizabeth Raymer

WWW.LEXPERT.CA | 2019 | LEXPERT 3 TOP 10 DEALS

plete the four components of the project THIS WAS A with the bridge scheduled to be in service YEAR IN WHICH by the end of 2024.” LAWYERS SUPERBLY There had been myriad legal challenges over those years, not the least of which was EXERCISED THE ART the consistent and litigious opposition of OF NEGOTIATION… the private citizen owner. There was also the AND OPENED A NEW issue of situating the legal border between Lexpert FRONTIER…AND SET OUT the two countries. As Kelsall wrote, the bor- TO BUILD A BRIDGE der between the two countries was by law in Magazine: BY JEAN CUMMING the middle of the river. “Thus, the WDBA and its counsel had to contend with the fact Top 10 Deals that there were two sets of laws applicable to the construction of the entire project. THE 2018 DEAL YEAR was full of consolidation — both domestically and globally. Picture a truck driving from the Canadian In the Cannabis sector, that theme promises to continue, perhaps with some casualties. side to the American side and doing work Moreover, the complications in the Canada-US relationship last year came up on a few of on the American side and then returning. the Top 10 Deals and on several of the Honourable Mentions. Here are the Top 10 Deals Which Construction Lien Act rules apply, and More from Lexpert® Magazine based on Lexpert-ranked lawyer feedback. which taxes, which environmental laws? “To deal with these multiple jurisdictional issues the team had to take cognizance of all of the applicable laws applying to the entire construction site. It was also neces- Canadian model. This model was seen to sary to seek enabling legislation such as the 1 be the most effective in allowing all of the Bridge to Strengthen Trade Act, a federal various constituents, the two countries, statute that was put in place to streamline Gordie Howe International Detroit and Windsor, all of the various certain requirements under various types of Bridge Project municipalities, First Nations, border secu- law for the Canadian side.” rity, etc. to have a voice while at the same The many lawyers and their stakeholder It had long occurred to observers that hav- time mandating an independent authority clients were determined to speak with one ing the Windsor-Detroit road bridge be- to drive the project to completion. Fasken voice as they engaged in the bid process. Ac- tween the two countries owned and con- was hired to represent Canada, the WDBA cording to Kelsall, at the recent Canadian trolled by a private US citizen presented a and the IA for the GH Project in 2010. The Council for Public Private-Partnerships’ vulnerability — especially for Canada. Plus, Crossing Agreement took shape in around annual conference, Nuria Haltiwanger, there were issues with the state of repair and 2012 with amendments through to 2017. Global CEO of ACS (part of the winning location of the Ambassador Bridge. Then With this document in place along with the consortium) “identified that the ability to Prime Minister Stephen Harper wanted Presidential Permit, the project was ready to deal with the WDBA and know that that a change; and so did Governor Snyder of commence procurement.” Authority spoke for all of the various con- Michigan — despite opposition. The WDBA announced on September stituents behind the scenes was an absolute According to Brian Kelsall, who, with 28, 2018, that “we have signed a fixed- imperative without which the transaction To m Barlow, led the Fasken Martineau Du- priced contract with Bridging North Amer- could not have been done.” Moulin LLP team: “with strong leadership ica to design, build, finance, operate and When it comes to the Canadian-US re- on both sides of the border, the concept maintain the Gordie Howe International lationship in 2018, Lexpert® and other Ca- of a crossing agreement between Canada Bridge project. The announcement also nadian publications wrote in worried tones and the United States was developed. This signified that all contractual steps have been about the break-up of NAFTA, the imposi- agreement would mandate the creation of completed and construction can begin. tion of stern tariffs, and the Buy American an international authority, the Windsor- “The fixed-priced contract is valued at position of the current President. And so Detroit Bridge Authority (the “WDBA”) $5.7 billion (nominal value), which in- we take notice when Kelsall describes this to be overseen by an international board cludes the design-build (DB) phase and Deal of the Year: (the “IA”) with representatives from both the operation, maintenance, rehabilitation “Lastly, it’s a storyof friendship. The proj- countries. Canada would pay for the GH (OMR) phase. Bridging North America ect would not have been completed with- Project in its entirety, hence avoiding the will receive progress payments during con- out the friendship and trust that was devel- legislative pitfall in Michigan and in return struction and a substantial completion oped between the two countries and their Canada would receive all of the tolls until it payment at the end of construction. They working teams. It’s a great example of what had recouped its investment. will also receive monthly payments for op- can be done when friends help each other.” “In addition, and importantly, it was erations and maintenance over the 30-year Windsor-Detroit Bridge Authority and recognized by both Canada and Michigan concession (operating) period. Her Majesty the Queen in Right of Canada that the procurement methodology for the “Bridging North America has presented were represented by Fasken Martineau Du- GH Project would be a P3 following the a 74-month construction schedule to com- Moulin LLP with a team led by To m Bar-

4 LEXPERT | 2019 | WWW.LEXPERT.CA low and Brian Kelsall, that included Ella (Competition/Antitrust), George Veghand Plotkin, Marc Lefler, Doug R. Scott, Bar- 2 Heloise Apestéguy-Reux (Energy Regulato- bara Miller, Sean Morley, Kathleen Butter- ry), Joanna Rosengarten (Environmental), field and Zackary Burashko, together with Brookfield Infrastructure Adam Ship and Paul Kunynetz (Franchise Rosalind Cooper, Daniel Fabiano, Gordon acquired Enercare Inc. and Distribution), Nancy Carroll (Insur- Hunter, Louise Kennedy, Alison Lacy, Mi- ance), Trevor Lawson, Patrick Pengelly and chael Round, Ryan Schnier, Scott Ma, Neil Cameron Belsher of McCarthy Té trault Matthew Demeo (Labour and Employ- Smiley, Sean Stevens and others. Windsor- LLP called Brookfield’s acquisition of En- ment), Ana Badour (Regulatory), Eric Block Detroit Bridge Authority was led in-house ercare the “largest go-private this year by a and Kosta Kalogiros (Litigation), Deron by Vicky Tuquero and Kathleen Roberts. Canadian champion doing a deal in their Wa ldock and Kelleher Lynch (Pensions Advice on US law matters was provided by own backyard.” Oliver Borgers, McCarthy and Benefits), John Boscariol and Robert Wa rner Norcross + Judd LLP with a team Té trault, wrote that the “transaction was a Glasgow (Trade) and Ryan Prescott (Tech- that included Timothy Horner, Charlie very large and complex matter that drew on nologyand Intellectual Property). White & Goode, Christopher Meyer and others. pretty much every area of expertise among Case LLP advised Brookfield Infrastructure Bridging North America General Part- legal counsel. It stands out as a major deal in the US with a team that included Oliver nership and BNA O&M General Part- that was flawlessly executed.” Brahmst, Samuel Raboy and Adam Cieply nership were led in-house by Marc Aron, On October 16, 2018, Brookfield In- (Corporate), and Binoy Dharia and Shana Chief Legal Officer, Mark Platteel, Gen- frastructure and its institutional partners, White (Financial Services). eral Counsel, Greg Wa lters, Vice President, (collectively, “Brookfield Infrastructure”) Enercare was led in-house by John To f- Legal, and Meno Te ssema, Associate Vice completed the acquisition of all the issued foletto, Senior Vice-President, Chief Le- President, Legal, for ACS, by Steven J. Pas- and outstanding common shares of Ener- gal Officer and Corporate Secretary with coe, VP Law, for Fluor and by Yonni Fush- care Inc. for $29.00 per common share or, a team that included Chelsea Provencher, man, Executive Vice President & Chief in the case of certain electing Canadian Senior Legal Counsel and Monique Lam- Legal Officer for Aecon. Blake, Cassels & resident shareholders, 0.5509 of an ex- pard, Legal Counsel. Enercare was advised Graydon LLP acted as counsel to Project changeable limited partnership unit (“Ex- by Davies Wa rd Phillips & Vineberg LLP Co with a team that included Catherine changeable LP Unit”) for each common with a team that included Bill Ainley, Brett Doyle, Mark Johnson, Aaron Palmer, Kath- share elected. The Exchangeable LP Units Seifred, Ha Nguyen, and To dd Wierenga leen Penny, Samantha Rossman and Cath- are exchangeable, on a one-for-one basis (Corporate/M&A), Anita Banicevic and erine Youdan, together with Christine Fer- for non-voting limited partnership units David Feldman (Competition) and Paul guson, Chris Flood, Robert Frazer, Laura of Brookfield Infrastructure Partners L.P. Lamarre (Tax). Gagnon, Megan Shaw, Aletha Utley, Jon (“BIP”). The transaction was valued at $4.3 The acquisition was financed, in part, Viner and Joe Zed. Advice as to US Securi- billion, including debt. Enercare’s common through a new credit facility entered into ties Law matters was provided by Skadden, shares were subsequently delisted from the between Brookfield Infrastructure and a Arps, Slate, Meagher & Flom LLP with a To ronto Stock Exchange and Enercare has syndicate of lenders and the To ronto-Do- team that included Riccardo Leofanti and ceased to be a reporting issuer under appli- minion Bank (“TD Bank”), as administra- Annabelle Gardere. cable Canadian securities laws. tive agent and as issuing bank. TD Bank BNA Constructors Canada GP was BIP is a global infrastructure company was advised by Stikeman Elliott LLP with represented in-house by Adam Brody, Gen- that owns and operates high-quality, long- a team that included Craig Mitchell, Kelly eral Counsel for Dragados Canada Inc., life assets in the utilities, transport, energy Niebergall and Laura Von Heynitz. Jonathan van Ginhoven, Senior Counsel and data infrastructure sectors across North Stikeman Elliott LLP represented The for Fluor, and Patricia Skringer, Director, and South America, Asia Pacific and Eu- To ronto-Dominion Bank with a team that Operations Legal – East for Aecon, with rope. Enercare Inc. is one of North Amer- included Craig Mitchell, Kelly Niebergall, support from DLA Piper (Canada) LLP ica’s largest home and commercial services Laura Von Heynitz (Banking), Sean Van- with a team that included Andrew Burton, and energy solutions companies, as well as derpol (Securities), Paul Collins (Com- Elizabeth Mayer and Natasha Rana. the largest non-utility sub-meter provider petition), Glen Zacher (Regulatory) and The underwriters, lenders and hedge in Canada. Andrea Boctor (Pensions); and in the US, providers were represented by McCarthy McCarthy Té trault LLP advised Brook- Milbank, Tweed, Hadley & McCloy LLP Té trault LLP with a team that included field Infrastructure with a core team led by with a team including Mike Bellucci and Linda Brown, Morgan Troke, Samantha Jonathan See, Jake Irwin and Isabel Hen- Ben Eisenstein. Cunliffe, Robin Mahood, Liezl Behm, Ail- kelman, which included Cameron Belsher, Osler, Hoskin & Harcourt LLP acted for bish Skinner and Brianne Paulin. Robert Richardson, Scott Bergen and Ni- one of Canada’s largest pension investment Alternate bidders that did not ultimately cole Chiarelli, and included Patrick Mc- managers in connection with the equity prevail were represented by Osler, Hoskin Cay and Yaroslavna Nosikova (Tax), Ian co-investment that supported the funding & Harcourt LLP led by Chris Bennett; Mak and Noel Chow (Financial Services), of the acquisition with a team led by John and Davies Wa rd Phillips and Vineberg Sarit Pandya and Andrejs Mistiouk (Real Groenewegen and Sébastien Savage. LLP led by Greg Southam. Stikeman El- Property and Planning), Catherine Samuel, To rys with a team led by Karrin Pow- liott LLP acted as underwriter’s counsel to Andrew Armstrong, Shauvik Shah, Paulina ys-Lybbe acted as counsel to Brookfield the Ellis Don/Bechtel Consortium with Bogdanova and Andrea Schneider (Corpo- Infrastructure, as part of a consortium, Jamie Templeton. rate), Oliver Borgers and Jonathan Bitran including advice on the negotiation of the

WWW.LEXPERT.CA | 2019 | LEXPERT 5 LEXPERT-RANKED LAWYERS

inter-consortium arrangements, the offering of an Abdel-Barr, Khaled S. Lawson Lundell LLP exchangeable security option, as well as all HSR (604) 631-9233 [email protected] filings for the transaction.

Mr. Abdel-Barr practises corporate/commercial & mining law. He advises on a range of corporate/commercial mining matters, domestic & international, including M&A, debt & equity financings, corporate structuring & reorganizations, project development/operations, negotiation of commercial 3 arrangements such as earn-in, joint venture, strategic alliance & royalty agreements, and mineral title review. Algoma Steel Inc.

Essar Steel Algoma Inc. concludes a three-year re- Abraham, QC, Brian E. Dentons Canada LLP structuring under the CCAA and sale of substan- (604) 443-7134 [email protected] tially all of its assets to Algoma Steel Inc. On November 30, 2018, Essar Steel Algoma Mr. Abraham’s practice embraces mining exploration, development, Inc. (ESAI) concluded its comprehensive restruc- production and reclamation. He acts domestically and internationally for turing under the Companies’ Creditors Arrange- explorers, developers, producers, consultants, prospectors, syndicates and financiers. He has also participated in background studies for mineral ment Act by way of the sale of substantially all of legislation and has advised foreign governments regarding the preparation its assets to Algoma Steel Inc. (ASI), a company and implementation of mining legislation. sponsored by ESAI’s existing senior secured term lenders and 9.5% senior secured noteholders (the Secured Lenders) pursuant to a restructuring sup- Allard, David A. Lawson Lundell LLP port agreement. In connection with the sale, the (604) 631-9108 [email protected] Secured Lenders exchanged their existing secured claims for equity in ASI and certain Secured Mr. Allard practises in the areas of M&A, corporate and commercial, Lenders backstopped and funded a US$285 mil- and corporate finance and securities law. He advises private and public lion exit term loan facility. ASI also obtained a companies on purchase and sale transactions, significant strategic and general corporate commercial matters and corporate structuring (through US$250 million revolving ABL facility from a joint ventures and reorganizations), as well as public company governance syndicate of third-party lenders led by Wells Fargo and compliance issues. Capital Finance Corporation Canada. In addition to ESAI’s assets, ASI also purchased the port assets used at the company’s port facility in Sault Ste. Anderson, D. Brett Felesky Flynn LLP Marie to effectively unwind a 2014 transfer of the (403) 260-5637 [email protected] port assets which the CCAA court found to be oppressive earlier in the proceedings. Through the Mr. Anderson’s practice includes all areas of Canadian taxation law, restructuring ASI also implemented revised col- with a particular focus on M&A, corporate reorganizations, and international lective bargaining agreements with the hourly and tax planning. He also assists clients in resolving disputes with the Canadian tax authorities. He was admitted to the Alberta Bar in 2004 after articling at salaried local unions and obtained certain pension the Supreme Court of Canada, and has been a Partner of Felesky Flynn LLP relief through legislation and regulations enacted since 2010. by the Province of Ontario. Stikeman Elliott LLP represented ESAI in Can- ada with a team of Ashley Taylor, Maria Konyukho- va, Lee Nicholson, Sanja Sopic (Restructuring/ Anderson, John F. Stikeman Elliott LLP Insolvency); John Ciardullo, Billy Rosemberg (604) 631-1307 [email protected] (Corporate), Peter Hamilton, Meaghan Obee To wer (Banking); Andrea Boctor (Pensions); Larry Mr. Anderson is a partner practising corporate and securities law with a focus Cobb, Patrick Duffy (Environmental); John Lor- on public M&A, and a general corporate practice that also involves private ito, Margaret Nixon, Eryn Fanjoy (Tax); Michael M&A, joint ventures, corporate finance/securities and corporate governance. He is head of the firm’s Korea initiative. His primary expertise is in the mining, Kilby (Competition); Eliot Kolers, Daniel Mur- forestry and technology sectors. doch, Patrick Corney (Litigation); Andrew Elliott, Neil Shapiro (Real Estate); Lorna Cuthbert, Nancy Ramalho (Labour and Employment); and Justine Whitehead (Intellectual Property). Weil, Gotshal Antonopoulos, George Dentons Canada LLP (403) 268-7136 [email protected] & Manges LLP represented ESAI in the United States with a team of Ray Schrock, Kelly DiBlasi, Mr. Antonopoulos acts for companies in the energy sector, focusing on David Cohen (Restructuring/Insolvency); and Sa- the planning, drafting, negotiation and completion of complex energy sha Shulzhenko (Banking). FTI Consulting Inc. transactions and project work in both the upstream and midstream oil & acted as Chief Restructuring Advisor to ESAI with gas sectors, including advising clients on M&A, joint-venture arrangements, commodity transportation, storage arrangements, corporate a team of John Strek and Robert Del Genio and re-organizations, and energy project development. Evercore Group L.L.C. acted as financial advisor

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to ESAI with a team of Daniel Aronson, Bo Yi and Akshay Natarajan. Archer, Marcus W. Norton Rose Fulbright Canada LLP Ernst & Young Inc. acted as Monitor of ESAI (403) 267-9547 [email protected] and other affiliates with a team of Brian Denega, Sharon Hamilton, Allen Yao, Matt Kaplan, Fiona Mr. Archer focuses on debt and equity public and private financings, mergers Han, Matt Budd (Restructuring); Jay Patel, Moshe & acquisitions, reorganizations and purchases and sales of businesses and assets. He has led or co-led a number of the largest energy-related Deutsch, Robert Stall, Te rrance Yeung (Valuations); transactions in Canada and is consistently recommended by Lexpert® for Brendan Gallagher (Capital Equipment Valuation); Corporate Finance & Securities, is recognized by Best Lawyers for Securities Uros Karadzic, Faisal Siddiqi (Pensions); Craig and was an Acritas Star for 2017. Roskos, Charanjit Girn (Transaction Ta x); Sean Kruger (Transfer Pricing); Jan Pedder, Lynne Sang- Bakshi, Vivek Dentons Canada LLP ster (Indirect Ta x); and Garth Marshall (Geology) (416) 863-4658 [email protected] and Gowling WLG represented the Monitor with a team of Derrick Tay, Clifton Prophet, Nicholas Mr. Bakshi represents clients in the energy, natural resources and Kluge, Dom Glavota (Restructuring/Insolvency); infrastructure sectors. He specializes in the structuring, negotiation and Kathleen Ritchie (Corporate); Ash Gupta (Tax); documentation of natural resource projects and related financings, and in domestic and cross-border mergers & acquisitions in the oil, gas, water and Chris Alam, Kelby Carter (Banking). power sectors. He has considerable international experience in London, Osler, Hoskin & Harcourt LLP represented ASI Tokyo and more. and certain senior secured term lenders in Canada with a team led by Marc Wa sserman and Kevin Morley, Michael De Lellis, Andrea Lockhart, Mar- tino Calvaruso and Sean Stidwill (Restructuring/ Insolvency); John MacDonald (Litigation); John Baldwin, Chris G. Lawson Lundell LLP Groenewegen, Charlie Zilvytis (Corporate); Lau- (604) 631-9151 [email protected] rie Barrett, Jason Pearlstein, Jeremy Burgess (Bank- ing); Paul Litner, Jon Marin (Pensions); Sven Poysa Mr. Baldwin advises on mine development, construction, operation and mining M&A in Canada and the world. His practice includes mining contracts (Labour and Employment); Jennifer Fairfax, Pat- with foreign governments, IBAs with Aboriginal groups, JVs, royalties, rick Welsh (Environmental); Firoz Ahmed, Greg strategic alliances and partnerships. He has experience as an expert witness Wylie, Alex Klyguine (Tax); Shuli Rodal, Kaeleigh in mining-related litigation and arbitration. Kuzma (Competition); and Ryan Nielsen (Real Estate). Davis Polk & Wa rdwell LLP represented ASI and certain senior secured term lenders in the United States with a team of Damian S. Schaible, Barbeau, Marc B. Stikeman Elliott LLP Christopher Robertson (Restructuring/Insol- (514) 397-3212 [email protected] vency); Stephen Salmon, Bryan M. Quinn, Don- ald K. Lang (Corporate); J.W. Perry, Jonathan B. Mr. Barbeau is Chair of Stikeman Elliott and a member of the Partnership Board and Executive Committee. He is also a partner and former head of the Brown, Louis Labriola (Banking); Lucy W. Farr Corporate Group in the Montréal office. He practises in the areas of mergers and Tracy L. Matlock (Tax). Rothschild & Co. US & acquisitions, complex reorganizations and corporate governance, including Inc. acted as financial advisor to the senior secured in advising senior management and boards of directors. term lenders and ASI with a team of Stephen Anti- nelli, Nic Hooper, Michael Speller, Kevin Glodow- ski and Rolf Arnold. PricewaterhouseCoopers Inc. Bélanger, Carl Fasken Martineau DuMoulin LLP also acted as financial advisor to the senior secured (514) 397-4332 [email protected] term lenders and ASI with a team of John Mc- Kenna and Ian Dunlop. Mr. Bélanger is a partner & co-president of the Corporate/Commercial Law Goodmans LLP represented the ad hoc com- group. He is based in Montréal and his practice focuses on commercial mittee of 9.5% senior secured noteholders in Can- transactions and corporate structures, including mergers, acquisitions, venture capital and private-sector funding. He has been especially active in ada with a team consisting of Robert Chadwick, transactions involving private equity funds and business successions through Joseph Latham, Bradley Wiffen, Andrew Harmes management and other buyouts. (Restructuring/Insolvency); Tim Heeney (Cor- porate); Jeff Citron, Dan Dedic (Banking); David Conklin (Litigation); Glenn Ernst and Alan Bow- Belovich, Donald G. Stikeman Elliott LLP man (Tax); Ken Herlin (Real Estate); and David (416) 869-5606 [email protected] Rosner (Competition). Lenczner Slaght Royce Smith Griffin LLP, Mr. Belovich is a partner in the Capital Markets, Securities and Mergers & Blake, Cassels & Graydon LLP, and Brauti Thorn- Acquisitions Groups. His practice focuses on mergers & acquisitions, public ing Zibarras LLP represented GIP Primus, L.P. financings and complex corporate reorganizations. He acts as counsel to issuers and underwriters in connection with initial public offerings and other and Brightwood Loan Services L.L.C. in connec- public offerings and private placements. He is a co-founder of 100 Guys tion with the sale of the port assets with a team Who Care Oakville.

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consisting of Peter Griffin, Monique Jilesen, Scott Biberdorf, QC, Donald K. Felesky Flynn LLP Rollwagen, Matthew Lerner, Chris Trivisonno, (403) 260-5404 [email protected] Robert Trenker (Litigation), Steven Weisz, Cait- lin Fell (Restructuring/Insolvency), Michael Har- Mr. Biberdorf was appointed Queen’s Counsel in 2014. His practice covers quail, Charles McRoberts (Banking); Jamie Kou- a broad range of business and personal taxation matters, with emphasis on manakos and David Kruse (Corporate); Chris M&A, corporate tax planning, resource taxation, reorganizations of public and private corporations, estate planning, and dispute resolution with taxation Huband (Real Estate); Paul Stepak and Allan authorities. He has been a frequent speaker at conferences of the Canadian Gelkopf (Tax). Tax Foundation. McMillan LLP represented the exit term lenders and exit ABL lenders in Canada with a team of Wa ël Rostom, Tushara We erasooriya (Restructur- Bigué, AdE, Ann Dentons Canada LLP ing/Insolvency), Jeff Rogers, Don Waters, Darcy (514) 878-8808 [email protected] Ammerman, Alex Ricchetti, Julie Han, Emily Csiszar, Rob Scavone (Banking), David Ross, Jen- Ms. Bigué’s administrative, constitutional and regulatory law practice nifer Mandel, Alma Borojeni (Real Estate), David focuses on Aboriginal law, as well as energy and natural resources law and Wentzell (Pensions), Ralph Cuervo-Lorens (En- environmental assessment. She has extensive experience in the negotiation of agreements between governments, Aboriginal communities and project vironmental), Michael Friedman, Jamie Wilks proponents related to the development and implementation of energy, mining (Tax), Mary Flynn-Guglietti (Municipal Law), and industrial projects. Mike Richmond, Sharon Groom, Paul Boshyk, Geoffrey Kubrick, Paul Davis, and Lyndsay Wa s- ser (Corporate, Energy, and Labour and Employ- Binder, Joel E. Stikeman Elliott LLP ment). Simpson Thacher & Bartlett LLP repre- (416) 869-5233 [email protected] sented the exit term lenders and exit ABL lenders in the United States with a team of Justin M. Mr. Binder is a partner in the Corporate Finance, Securities and Mergers Lungstrum, Stephanie A. Rotter, Jeffrey S. Her- & Acquisitions Groups. He has a broad corporate/securities practice and scott, Juan J. Gonzalez, Michael Peragine, Janet frequently represents public issuers, boards of directors and investment dealers in connection with public offerings, private placements, take-over M. Nadile, Jonathan S. Pall (Banking); Sandeep bids, business combinations and governance and securities Qusba (Restructuring/Insolvency); Genevieve compliance matters. Dorment (Intellectual Property); Timothy J. Mul- vihill (Environmental); Timothy Gallagher (Real Estate); Abram J. Ellis, Mark B. Skerry (Anti-Cor- ruption/Sanctions); Nicole M. Humphrey (Tax); Boislard, Michel Fasken Martineau DuMoulin LLP and Jeanne M. Annarumma (ERISA). (514) 397-7634 [email protected] Paliare Roland Rosenberg Rothstein LLP represented the USW and its Local 2724 with a team Mr. Boislard has leading expertise in commercial law, primarily in the areas of of Massimo (Max) Starnino, Kenneth T. Rosen- mergers & acquisitions, corporate financing, investment funds and securities. He also advises clients from the high technology and biotechnology sectors. berg, Lily Harmer, Emily Lawrence and Lauren Numerous public and private corporations trust him to represent them during Pearce (Restructuring/Insolvency and Labour and complex domestic and international cross-border transactions. Employment). Davies Wa rd Phillips & Vineberg LLP provided transactional legal support, with a team of Robin Schwill and Christopher Anderson (Corporate). FTI Consulting Canada Inc. acted as financial advisor to the USW and its Local 2724 Bourassa, Michael J. Fasken Martineau DuMoulin LLP with a team of Paul Bishop, Jim Robinson and Pat- (416) 865-5455 [email protected] rick Kennedy and Prism Economics Inc. also acted as financial advisor represented by Ken Delaney. Mr. Bourassa’s practice is focused in the mining industry. Providing advice on public Cavalluzzo LLP represented USW Local 2251 financings, commercial mining agreements, and corporate social responsibility, and litigation support, he also has significant expertise in international mining due with a team of Michael Wright, Tracey Henry, diligence issues concerning title, technical matters and environmental risks. Amanda Darrach and Alex St. John (Litigation and Labour and Employment). Ursel Phillips Fellows Hopkinson LLP acted as representative counsel for certain of ESAI’s re- Braithwaite, William J. Stikeman Elliott LLP (416) 869-5654 [email protected] tirees with a team of Susan Ursel, Karen Ensslen, Katy O’Rourke, Ashley Schuitema and Erin Epp Mr. Braithwaite is a senior partner and was Chair of the firm from 2012 to (Litigation and Pensions). 2018. He practises primarily in mergers & acquisitions and corporate finance. Osler partner Kevin Morley wrote that the deal He has acted as counsel to major Canadian corporations, boards of directors, involved “virtually every major Bay Street firm as and institutional shareholders, and various governments and regulatory authorities. He was ranked as one of the Top 25 Most Influential Lawyers well as NY advisors, counsel and investors. Both in Canada in 2018. the federal and provincial governments, includ-

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ing the change of governments with the latter and the punitive US tariffs impacting the former, were critical constituents in a resolution which resulted Breen, Elizabeth Stikeman Elliott LLP in the salvation of one of two major remaining steel (416) 869-5267 [email protected] producers in Canada and the City and people of Sault Ste Marie.” Ms. Breen is a partner in the Mergers & Acquisitions, Capital Markets, Banking & Finance and Private Equity Groups. Her practice focuses on McMillan LLP added, “As counsel to exit lend- mergers & acquisitions, debt and equity financings, and other major ers we needed to provide the lenders comfort that transactions. She has acted for a significant number of foreign investors all restructuring efforts made by Algoma and Buy- in respect of their Canadian strategic objectives. er work for exit lenders and provided appropriate structuring advice.” To rys, with a team led by To ny DeMarinis and including David Bish (Restructuring), and Patri- Burkett, Michael Stikeman Elliott LLP cia Jackson, Andrew Gray, and Jeremy Opolsky (416) 869-5675 [email protected] (Litigation), acted for Essar Group of companies, headed by Essar Global Fund Limited and man- Mr. Burkett is a partner in the Mergers & Acquisitions Group whose practice focuses on advising public and private companies and private equity aged by Essar Capital Americas, Limited, as the investors on complex domestic and cross-border mergers & acquisition sole owner/shareholder of, and provider of key ser- transactions, divestitures, going-private transactions, as well as public vices to, Essar Steel Algoma Inc. in its restructuring company governance and compliance issues. proceedings under the CCAA and Chapter 15 of the US Bankruptcy Code.

Carelli, Robert Stikeman Elliott LLP 4 (514) 397-2408 [email protected] Mr. Carelli is a partner in the Securities Group and Head of the Montréal office’s Corporate Group. His practice is focused primarily in the areas of Teck Resources Limited (“Teck”), securities, capital markets, public and private mergers & acquisitions and closed the sale of its two-thirds governance. He advises issuers and underwriters on public offerings and interest in the Waneta Dam private placements, boards of directors and private equity funds. in British Columbia to BC Hydro for $1.2 billion cash Carfagnini, Jay A. Goodmans LLP As of July 26, 2018, according to Te ck’s press re- (416) 597-4107 [email protected] lease: “Teck will record an after-taxgain of approximately $820 million as a result of the sale, with no Mr. Carfagnini heads Goodmans’ Corporate Restructuring Group. He has cash tax payable on the proceeds. particular expertise in corporate reorganizations and transactions involving Canada, the US and UK. Best Lawyers in Canada named him Toronto “As part of the sale, Te ck Metals Ltd. (‘Te ck Met- Insolvency & Financial Restructuring Lawyer of the Year in 2011 and 2019. als’) holds a 20-year lease to use the two-thirds in- He is recognized as one of the top 30 insolvency/restructuring lawyers terest in Wa neta to produce power for its industrial worldwide by Euromoney’s Best of the Best. operations in Trail. Annual payments will begin at approximately $75 million per year and escalate at 2% per annum, equivalent to an initial power price Castiel, Peter Stikeman Elliott LLP of $40/MWh based on 1,880 GWh of energy per (514) 397-3272 [email protected] annum. Te ck Metals has an option to extend the lease for a further 10 years at comparable rates.” Mr. Castiel is a partner in the Corporate Group and a member of the firm’s Te ck was represented in-house by Peter Rozee Partnership Board and Executive Committee. His practice primarily focuses (Senior VP, Commercial and Legal Affairs), Nick on cross-border mergers & acquisitions. He has extensive expertise in advising private equity funds, sovereign wealth funds and leading public Uzelac (Corporate Counsel) and Doug Pow- and private companies in connection with acquisitions, divestitures rie (tax), and was assisted by a team from Fasken and investments. Martineau DuMoulin LLP led by Ron Ezekiel, and comprised of Kai Alderson, Steven Catania and Sarah Martin (M&A/Energy), Chris Sharpe (Real Property), Don Dalik (Competition), Brent Castiglio, Gabriel Fasken Martineau DuMoulin LLP Lewis (Financing), David Both (Regulatory) and (514) 397-7499 [email protected] Michael Coburn and Hardeep Gill (Tax). Pamela Anderson (Energy), Michael Carr (Corporate) Mr. Castiglio specializes in business law, more specifically in mergers & and Jeff Wyszynski (Real Property) of Perkins acquisitions of private and public corporations, securities, and corporate governance. Large public and private corporations trust him to handle Coie LLP also assisted with respect to certain US complex purchase, sale, financing and restructuring transactions of legal matters. companies in Canada and internationally.

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BC Hydro was represented in-house by Vicki Cattanach, J. Rory Wildeboer Dellelce LLP Antoniades (Project Manager, Power Acquisitions (416) 361-4766 [email protected] and Contract Management), and was assisted by a team from Lawson Lundell LLP led by Lana Mr. Cattanach practises primarily in the areas of securities, corporate Shipley, and comprised of Gordon Craig, Jeff finance, corporate governance corporate/commercial, M&A, and Scobie and Jada Te llier (M&A/Energy), Christine banking law. He acts for a variety of early stage and mature technology, biotechnology, telecom and traditional economy companies (both Canadian Kowbel (Environmental), Ed Wilson (Real Prop- and international) and has been involved in numerous public and private erty), Valerie Mann (Competition), Jeff Christian financings and secured lending transactions. and Clara Ferguson (Regulatory), Keith Bergner (Aboriginal), and Mandeep Dhaliwal and Brenda Lightbody (Financing). Deanna King of Brace- Chadwick, Robert J. Goodmans LLP well LLP also assisted with respect to certain US (416) 597-4285 [email protected] legal matters.

Mr. Chadwick focuses on corporate, banking, private equity, insolvency, reorganizations and related litigation and M&A on national, cross-border and international matters. He represents a diverse client group including debtors, monitors, noteholders, industry regulators, governments, private-equity 5 firms, and lenders in high profile restructurings across Canada’s key industry sectors. BSR Real Estate Investment Trust IPO

BSR Real Estate Investment Tr ust completed its Chamberland, Jean-Pierre Fasken Martineau initial public offering of 13,500,000 trust units at DuMoulin LLP (514) 397-5186 [email protected] a price of US$10.00 per unit for gross proceeds of US$135 million. Mr. Chamberland is responsible for the Québec Region Securities and In connection with the offering, the REIT in- Mergers & Acquisitions practice group. He practises business law and helps clients achieve their strategic and commercial objectives. He specializes directly acquired a 48-property portfolio of mul- in securities and financing, mergers & acquisitions, governance, structured tifamily garden-style residential properties (one products and commercial transactions. of which is to be acquired following closing of the offering) located across five bordering states in the Sunbelt region of the United States, held indirect- ly by BSR Tr ust, LLC (BSR). The net proceeds of Chatwin, Keith R. Stikeman Elliott LLP the offering were used by the REIT to repay ap- (403) 266-9088 [email protected] proximately US$122.3 million of indebtedness owing by BSR and to fund transaction costs asso- Mr. Chatwin is a partner in the Capital Markets and Mergers & Acquisitions ciated with the offering. Groups. His practice involves a broad array of securities and general corporate transactions, ranging from public and private debt and The offering was underwritten by a syndicate of equity financing to mergers & acquisitions, corporate restructuring and underwriters led by BMO Capital Markets, and recapitalizations, and shareholder activism and defence. included CIBC Capital Markets, RBC Capital Markets, Scotiabank, TD Securities Inc., National Bank Financial Inc., Raymond James Ltd., Canac- cord Genuity Corp., Desjardins Securities Inc., Cherniawsky, QC, Donald N. Felesky Flynn LLP Industrial Alliance Securities Inc. and Echelon (780) 643-3060 [email protected] Wealth Partners Inc. The REIT granted the underwriters an over-allotment option, exercisable in With his CA designation and LLB, Mr. Cherniawsky’s practice involves providing whole or in part at any time up to 30 days after the ongoing income tax planning advice to private corporations and their shareholders closing of the offering, to purchase up to an addi- on business expansion and business sale transactions, and owner-manager compensation. He teaches for CPA Alberta and CBA Tax Law For Lawyers, tional 2,025,000 units at a price of US$10.00 per with a focus on recently enacted, significant legislative changes. unit which, if exercised in full, would increase the total gross proceeds to US$155,250,000. The net proceeds of the over-allotment option, to the extent exercised, will be used by the REIT Chernin, Lawrence S. Goodmans LLP (416) 597-5903 [email protected] for capital expenditures on the initial properties, to repay indebtedness or for future acquisitions. Mr. Chernin has over 25 years’ experience in Canadian and international On closing of the Offering, existing members M&A, public company and private-equity transactions. He has acted for of BSR retained an aggregate approximate 66-per- issuers and underwriters in connection with public offerings including debt cent ownership interest in the REIT and will re- and cross-border offerings. He has provided advice on many significant M&A transactions, plans of arrangements and take-over bids, and advised special tain an aggregate approximate 63-per-cent own- committees of public companies. ership interest in the REIT if the over-allotment

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option is exercised. Certain of these holders are members or affiliates of the Bailey family or are members or affiliates of the Hughes family (collec- Chevrette, Charles McMillan LLP tively, the Bailey/Hughes Holders), who together (514) 987-5003 [email protected] founded BSR. The Bailey/Hughes Holders together own 17,210,733 class B units of BSR,which Mr. Chevrette is the Co-Chair of McMillan’s Private Equity Group and Technology Group and the Office Management Partner of McMillan’s Montréal are economically equivalent to and redeemable office. He is a market leader in private equity, venture capital, mergers & for units of the REIT on a one-for-one basis, and acquisitions (M&As), as well as in sophisticated cross-border transactions. 3,037,159 units of the REIT, together representing He is particularly active in IT, telecom and the financial services sector. an aggregate approximate 51-per-cent ownership interest in the REIT, and an aggregate approximate 49-per-cent ownership interest in the REIT if the Christian, Jeff Lawson Lundell LLP over-allotment option is exercised. (604) 631-9115 [email protected] Goodmans LLP represented the REIT in Can- ada with a team led by Stephen Pincus and Brad Mr. Christian is a litigation partner at Lawson Lundell LLP, with a practice Ross (Corporate/Securities) that included Emily focused on energy and regulated utilities. He represents utilities, power marketers and consumer groups in proceedings before administrative Weizel and Tara Hunt (Corporate/Securities), Jon tribunals such as the BCUC, the AUC and the NEB. He was named Energy Northup and Ken Saddington (Tax) and Francy Regulatory Law Lawyer of the Year in Vancouver for 2013 by Best Lawyers Kussner (Insurance); and by Mitchell, Williams, in Canada. Selig, Gates & Wo odyard, PLLC in the United States with a team that included Harry Hamlin and Melissa Bandy (Real Estate), Nicole Lovell Ciardullo, John J. Stikeman Elliott LLP (Corporate/Securities), Jennifer Pierce (Tax) and (416) 869-5235 [email protected] Nate Read (Employment). Blake, Cassels & Graydon LLP represented Mr. Ciardullo is a partner and Head of the Corporate Group. He is also the Underwriters in Canada with a team that in- former Head of the Capital Markets and Public Mergers & Acquisitions Group. He has significant experience in a wide range of corporate and securities cluded William Fung, Eric Moncik, Neelu To or transactions, with a particular emphasis on complex merger & acquisitions and Raees Nakhuda (Corporate/Securities), and transactions, proxy contests/contested meetings and corporate Andrew Spiro and Sabrina Wong (Tax). The Un- finance transactions. derwriters were represented by Greenberg Traurig LLP in the United States with a team that included Andy White and Barbara Jones (Corporate/Secu- Clifford, John F. McMillan LLP rities), Neil Oberfeld, Nicholas Dyer and Christina (416) 865-7134 [email protected] George (Real Estate), and Bob Simon and Jennifer Weiss (Tax). Mr. Clifford’s practice is focused on private company mergers & acquisitions, complex commercial transactions and reorganizations, and advising on competition compliance matters. He has extensive experience advising a diverse range of clients on domestic and cross-border matters across many industries, and he is recognized internationally for his expertise 6 and experience. Canadian Tire acquisition of Helly Hansen Colborne, Michael W. Thorsteinssons LLP As of July 3, 2018, Canadian Tire Corporation (416) 864-9783 [email protected] closed the acquisition of the company that owns and operates the Helly Hansen brands and related Mr. Colborne’s practice focuses on corporate and international tax planning, businesses. Helly Hansen is a leading global brand regularly advising Canadian and foreign-based multi-national groups on a variety of matters, including financing, mergers & acquisitions and natural in sportswear and workwear based in Oslo, Nor- resource taxation. He also has considerable experience in handling tax way. Canadian Tire explains that it: controversy issues in Canada and a number of other countries. “is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, Corbett, Leland P. Stikeman Elliott LLP which was founded in 1922 and provides Cana- (403) 266-9046 [email protected] dians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal Mr. Corbett is a partner in the Banking & Finance, Mergers & Acquisitions and & Gardening divisions. PartSource and Gas+ are Capital Markets Groups. His practice focuses on the corporate-commercial key parts of the Canadian Tire network. The Retail area and he acts in public and private financing and other capital markets transactions, including corporate and investment banking transactions, share segment also includes Mark’s, a leading source for and asset acquisitions and dispositions, securities transactions and other casual and industrial wear; Pro Hockey Life, the M&A activity.

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world’s largest hockey centric retailer; and FGL Cusinato, Curtis Bennett Jones LLP (Sport Chek, Hockey Experts, Sports Experts, (416) 777-5774 [email protected] National Sports, Intersport and Atmosphere), which offers the best active wear brands. The Mr. Cusinato is a partner practising corporate and securities law, approximately 1,700 retail and gasoline outlets with a focus on cross-border M&As and capital markets transactions. are supported and strengthened by our Finan- He has advised leading public and private companies and private equity groups on domestic and cross-border mergers & acquisitions, divestitures, cial Services division and the tens of thousands leveraged and management buyouts, going-private transactions and other of people employed across the country by the private equity transactions. Company and its local dealers, franchisees and petroleum retailers.” The cross-border transaction was led for Ca- nadian Tire by Norton Rose Fulbright’s Wa lied d’Anglejan-Chatillon, Alix Stikeman Elliott LLP Soliman, Terence Dobbin and Troy Ungerman, (514) 397-3240 [email protected] and included Chris Pearson, Jon Perry, Pierre Dagenais, Bruce Sheiner, Seemal Patel, Trevor Ms. d’Anglejan-Chatillon is a partner and Co-Head of the Financial Zeyl, Robert Corbeil, Saskia Blokland and Jas- Products & Services Group. She practises principally in the areas of investment management, the regulation of capital markets and derivatives. per Geerdes (Corporate, M&A and Securities), She frequently lectures on derivatives, hedge funds and financial Adrienne Oliver, Brian Milne, Dominic Stutta- products regulation. ford and Remco Smorenburg (Tax), Kevin Ack- hurst and Anastasia Kastelskaya (Competition/ Anti-trust), Chris Hunter (Intellectual Proper- ty), Robert Percival (Information Te chnology), Davies, QC, Donald G. Norton Rose Fulbright Canada LLP Mike Knapper (Regulatory), Lisa Cabel and (403) 267-8183 [email protected] Senka Grahovac (Employment & Labour), Mat- thew Findley (Employee Benefits and Executive Mr. Davies practises energy law, with a focus on the regulatory and litigation Compensation), Michael Lieberman and Alex fields. He has acted for both proponents and intervenors in many applications for the approval of pipeline facilities and for the determination of pipeline Fane (Real Estate), Noah Schein (Finance), and tolls and tariffs. His cases typically involve complex environmental, Aboriginal, Sara Josselyn (Insurance). constitutional, jurisdictional, economic and financial issues. Osler advised the underwriters on Canadian Tire’s debt offering to partially fund the acquisition with a team led by Michael Innes. Dellelce, Perry N. Wildeboer Dellelce LLP To rys with a team led by Laurie Duke acted (416) 361-5899 [email protected] for Ontario Te achers’ Pension Plan as Canadian counsel in its sale of Helly Hansen to Canadian Managing Partner of Wildeboer Dellelce, one of Canada’s leading business Tire Corporation, Limited. transactions law firms, Mr. Dellelce practises in the areas of securities, corporate finance and M&A, offering legal and corporate finance experience combined with hands-on business experience across a range of sectors including financial services. Recognized by Lexpert® for Technology Transactions and Global Mining. 7 Coca-Cola sale to Kilmer Dubé, Georges McMillan LLP (416) 865-7876 [email protected] On September 28, 2018, Coca-Cola Canada Bottling Limited (“CCCBL”), a joint venture Mr. Dubé has extensive public markets experience in corporate finance and M&A established between prominent business per- transactions in the domestic and cross-border context. Industries have included real son and philanthropist Larry Tanenbaum, OC, estate, medical cannabis, mining and technology. He regularly assists with strategic decisions by boards and often acts for special committees and financial advisors and Junior Bridgeman, a former NBA player, in the context of change of control and related-party transactions. renownedentrepreneur and owner of KansasCity- based Heartland Coca-Cola Bottling Company, completed its previously announced acquisition of Coca-Cola Refreshments Canada Company (“CCRC”) from Coca-Cola Refreshments USA, Durand, Ron Stikeman Elliott LLP Inc., a subsidiary of The Coca-Cola Company (416) 869-5542 [email protected] (NYSE:KO). CCCBL continues to employ 5,800 CCRC Mr. Durand is a senior counsel to the firm with respect to tax matters employees and is responsible for all Coca-Cola and a former Head of the Tax Group. He has been involved in numerous divestitures, mergers & acquisitions, reorganizations, corporate bottling and distribution operations across Can- restructurings and financings. ada, including the operation of five production

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facilities and over 50 sales and distribution cen- Engbloom, QC, Robert J. tres. CCCBL will continue to offer a wide variety Norton Rose Fulbright Canada LLP of beverages, including some of the most popular (403) 267-9405 [email protected] brands in Canada such as Coca-Cola®, Diet Coke®, Coca-Cola® and vitaminwater®. Mr. Engbloom advises clients on M&A, transactional, governance and The Coca-Cola Company was represented general business matters. He has acted as lead counsel on a wide variety of significant transactions and has extensive experience in providing advice on internally by a team led by John Uyham (Senior mergers & acquisitions, reorganizations and related-party transactions, as Counsel - Mergers and Acquisitions) and Brian well as advising boards and special committees on both governance matters Henry, VP and Senior Managing Partner, as well and substantive transactions. as its Canadian in-house counsel Scott Kirkpat- rick (General Counsel) and Andrew Brock (Le- gal Counsel). Estep, Laura K. Dentons Canada LLP The Coca-Cola Company was externally led (403) 268-6308 [email protected] by transaction counsel, DLA Piper (Canada) LLP. The M&A team in Canada was led by Rus- Ms. Estep assists major oil & gas companies through all stages of the sel Drew (Toronto) and included Mackenzie regulatory process including representation before the NEB, the Alberta Utilities Commission, and the Alberta Energy Regulator. She has appeared Clark, Grace Latimer, Sandra Appel, Mitch- at various levels of court on energy-related appeal and judicial review ell Smith, Melissa Gaul, Christopher Pejovic, matters. She also advises energy clients on land acquisition Quinlan Winton, Matylda Makulska, Stephanie and compensation matters. Blakely, Lauren Storwick, Ryan Wa lter and Dan- iel Zajac. The DLA Piper (US) LLP team was led by Jeff Baglio (San Diego). Ezekiel, Ron Fasken Martineau DuMoulin LLP Blake, Cassels & Graydon LLP provided Ta x (604) 631-4708 [email protected] advice to The Coca-Cola Company in connection with the transaction, with a team led by Jef- Mr. Ezekiel is co-leader of Fasken’s Global Energy Group. Clients seek him frey Shafer and including Zvi Halpern-Shavim. out for his depth of expertise and his creative and practical problem-solving skills. His industry knowledge, ability to navigate complex negotiations McMillan LLP provided Competition Law ad- and broad business transaction background make him an ideal choice vice, with a team led by Casey Halladay and in- for counsel on projects and M&A transactions in the energy and natural cluding Neil Campbell and William Wu. Cassels resources sectors. Brock & Blackwell LLP provided Regulatory, Environmental, Real Estate, Employment, Trade and Licensing advice, with a team that included Chandimal Nicholas, Alison Manzer and Rich- Feldman, Jonathan A. Goodmans LLP ard Ngo (Regulatory/Licensing), Signe Leisk, (416) 597-4237 [email protected] Adrianna Pilkington and Meghan Rourke (Envi- ronmental and Real Estate), Laurie Jessome and Mr. Feldman practises corporate/securities law with a focus on M&A. He has been involved in a number of contested shareholder matters, including proxy Caitlin Russel (Employment) and Brenda Swick contests representing both dissident shareholders and boards of directors, (International Trade). Bennett Jones LLP, with and is also often asked to participate in litigation matters where strategic a team comprising Leonard Griffiths (Environ- advice is sought and knowledge of corporate/securities law is required. mental), Jane Helmstadter and Alla Segal (Real Estate), Susan Seller (Pensions and Benefits) and Carl Cunningham (Employment), also advised. CCCBL was represented internally by Gen- Fien, Cy M. Fillmore Riley LLP nady Ferenbok, Vice President Legal, Kilmer (204) 957-8348 [email protected] Group, and Shellie Clausen, General Coun- sel, Heartland Coca-Cola Bottling Company, A senior tax partner of Fillmore Riley LLP, Mr. Fien practises primarily in the LLC, and externally by Goodmans LLP. The areas of taxation and trust law. He has extensive experience in corporate tax planning, corporate reorganizations, estate planning, trust law, and tax Goodmans team was led by Neil Sheehy and litigation. He taught corporate tax and estate planning courses at the Faculty Kirk Rauliuk, and included Laura Magisano of Law at the University of Manitoba for over 20 years. and Bryan Flatt (corporate/M&A), Ken Her- lin, Tyler D’Angelo and Lisa Hawker (Real Estate), Jeffrey Citron, Christopher Payne and Forte, Mario J. Goldman Sloan Nash & Haber LLP Danielle Knight (Finance), Alan Bowman and (416) 597-6477 [email protected] Michael Royal (Tax), Michael Koch (Competi- tion), John Alton (Pensions and Benefits) and Mr. Forte has extensive experience representing the principal participants Kate Lyons (Environmental). in Canadian and cross-border corporate restructurings, insolvencies, Fasken Martineau DuMoulin LLP represent- and distressed M&A. Since 1987, his practice has spanned all aspects of distress situations, including extensive involvement on behalf ed the Lenders (The Bank of Nova Scotia, Bank of creditors, investors and corporate clients, including strategic board of Montreal and National Bank of Canada), with and committee representation.

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a team led by John To rrey and including Da- Freeman, Sheldon Goodmans LLP vid Ferris and Dan Conrad (Banking), Allyson (416) 597-6256 [email protected] Roy (Real Estate), Brad Freelan (Securities) and Chris Steeves (Tax). Mr. Freeman practises M&A, corporate finance and securities law advising on a wide range of domestic and cross-border matters, including acquisition and defence strategy, transaction structuring and all relevant legal considerations. He also acts on a broad range of capital markets 8 transactions and advises on corporate matters ranging from formation to shareholder disputes and liquidity events. Scotiabank acquisition of Jarislowsky, Fraser Ltd.

Gagné, Martin R. Fasken Martineau DuMoulin LLP On May 1, 2018, Scotiabank announced the (418) 640-2001 [email protected] completion of its $950 million acquisition of Jaris- lowsky, Fraser Ltd. to create the third-largest Cana- Mr. Gagné specializes in corporate, commercial and real estate law, as well dian active asset manager with $166 billion in assets as corporate and project financing. A large part of his practice is devoted to mergers & acquisitions, financings, joint ventures and reorganizations. He under management (as of December 31, 2017). represents clients operating in various industries such as natural resources, Scotiabank is Canada’s international bank and a specifically the mining, forestry, and oil & gas sectors. leading financial services provider in North Amer- ica, Latin America, the Caribbean and Central America, and Asia-Pacific, with a team of more than 88,000 employees and assets of over $915 billion (as at October 31, 2017). Gamble, Ian J. Thorsteinssons LLP Jarislowsky, Fraser is one of Canada’s leading (604) 602-4290 [email protected] independent investment management firms, managing the portfolios of pension funds, foun- Mr. Gamble represents several corporate clients in the mining, forestry, telecommunications, oil & gas, energy and real estate sectors. His corporate dations and endowments, corporations and indi- and international tax practice includes merger & acquisition structuring, viduals in Canada, the United States and inter- tax opinions, CRA audit and transfer pricing defence, and tax appeals. nationally — representing more than $40 billion in assets under management. Scotiabank was represented internally with a team that included Ian Arellano (EVP & Gen- Gibson, QC, FCPA, FCA, Cheryl A. Dentons eral Counsel), Anita Mackey (SVP & Associate Canada LLP (780) 423-7310 [email protected] General Counsel), Alex MacMillan and Doug Robertson (Senior Counsel, Strategic Transac- Mr. Gibson practises in numerous facets of taxation law. She has extensive tions). To rys LLP provided external legal support experience in the resolution of income tax and GST disputes including criminal tax evasion matters and focuses on getting results in a timely and with a team led by (Ricco) A.S. Bhasin and which efficient manner. She advises on pension matters and has prepared opinions also included Susan Nickerson, Richard Johnson, on numerous tax and GST topics. Cameron Koziskie, Robert Fatt, Michael Meguid and Marko Trivun. Stephen A. Jarislowsky (founder of Jaris- lowsky, Fraser Ltd.) and S.A. Jarislowsky Invest- ments Inc. were represented by Davies Wa rd Gorman, William (Bill) Goodmans LLP Phillips & Vineberg LLP with a team that in- (416) 597-4118 [email protected] cluded William Rosenberg, Justin Vineberg, Brian Bloom, Olivier Désilets, Adam Fanaki and Mr. Gorman’s practice focuses on domestic and cross-border corporate finance and Christina Sauro. M&A. He represents public companies and underwriters in the energy sector in a range of transactions including initial public offerings, debt and equity financings Jarislowsky Fraser Ltd. was representedby Blake, and mergers & acquisitions. Cassels & Graydon LLP with a team that included Peter MacGowan, Navin Joneja, Howard Levine and Kathleen Penny. The partners of Jarislowsky Fraser Ltd. were rep- Grant, K. Vanessa A. Norton Rose Fulbright resented by Stikeman Elliott LLP with a team that Canada LLP (416) 216-4056 [email protected] included André Roy, Michel Gélinas (then at the firm), Julien Robitaille-Rodriguez, Luc Bernier, Ms. Grant’s practice focuses on public and private corporate finance (including Adam Drori, and Hélène Bussières. private equity) and M&A. She works with national and international clients Stephen A. Jarislowsky (founder of Jaris- across all industries, with a focus on technology (including fintech and AI) and life sciences (including digital healthcare, therapeutics, devices, diagnostics and lowsky, Fraser Ltd.) and S.A. Jarislowsky Invest- agribusiness). Co-Director of the Osgoode Hall LLM programme in business law. ments Inc. were advised by Richard Lewin from

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Wildeboer Dellelce LLP on Ta x matters relating to the sale. Graves, Brian Fasken Martineau DuMoulin LLP (416) 865-4517 [email protected]

Mr. Graves advises clients on mergers & acquisitions, corporate 9 finance, commercial and securities law matters. With a particular focus on cross-border transactions, he works mainly in the mining and natural Boat Rocker Media Inc., resource industries and, in particular, is considered an authority included for its acquisition on metal streaming transactions. of a majority stake in Insight Productions

Boat Rocker Media Inc. has come to describe it- Gregory, John N. Thorsteinssons LLP self as “a global entertainment company that cre- (604) 602-4268 [email protected] ates, produces and distributes premium media content for all platforms and develops brands and Mr. Gregory’s practice focuses on personal and corporate taxation, corporate reorganizations, syndications and international tax planning. He advises IP for worldwide monetization. Under its banner a number of private business groups and high net worth families on tax are Boat Rocker Studios (which includes Te mple matters. Their businesses are involved in various sectors including real estate Street, Crooked Horse, Proper, Jam Filled Enter- development and investment, hospitality, agriculture and entertainment. tainment and Radical Sheep), Boat Rocker Rights (which includes Boat Rocker Brands), and Boat Rocker Ventures (which includes investments in Industrial Brothers, MarcoPolo Learning, Serial Grieve, QC, John F. Fasken Martineau DuMoulin LLP Box, The Outline, and CAA Creative Labs). A se- (604) 631-4772 [email protected] lection of its recent projects includes Orphan Black (BBC AMERICA, Space), Killjoys (Syfy, Space), Mr. Grieve is an internationally recognized insolvency and restructuring lawyer, with a focus on advising major companies on complex commercial X Company (CBC), Being Erica (CBC, SOAP- reorganizations. As the immediate past Chair of the Firm’s Global Insolvency net), Masterchef Canada (CTV).” It was pleased and Restructuring group, (from 2007 to 2017), he has a wealth of experience to join with Insight, a leading television produc- in regional, national and international insolvencies and restructuring. tion company headquartered in To ronto, in an- nouncing: “Effective immediately, this investment enables Insight to increase and diversify its content offerings and move more aggressively into digital content while signifying Boat Rock- Gropper, QC, Mitchell H. Farris, Vaughan, Wills er’s continued growth in the Canadian market & Murphy LLP (604) 661-9322 [email protected] and around the world.” Mr. Gropper’s practice focuses on complex transactions focused on corporate Goodmans represented Insight Productions finance, reorganizations, M&A and commercial real estate. He has advised with a team that included Jonathan Feldman, boards of directors on take-over bids, going-private transactions and other Emily Ting and Sarah Macchione (Corporate/ corporate matters. M&A), Tara Parker (Entertainment), and Mitch Sherman (Tax). Stikeman Elliott acted for Boat Rocker Media Halperin, Stephen H. Goodmans LLP (on Matador Content, LLC;and FremantleMedia’s (416) 597-4115 [email protected] Kids & Family Entertainment division deals) with a team led by Simon Romano, Marie Garneau and Mr. Halperin was named among the top 30 M&A, capital markets and including Paul Neville and Martyna Wolska. governance lawyers worldwide by Euromoney (only Canadian in all three categories). He is a peer-selected Toronto corporate governance lawyer (2019 and four times previously), M&A lawyer (2017) and corporate lawyer (2015 and once previously) of the year in Best Lawyers in Canada, and has 10 the highest ranking for the past 18 years in Chambers. The Cannabis sector Harrison, QC, Elizabeth J. Farris, Vaughan, Wills is Deal #10 & Murphy LLP (604) 661-9367 [email protected]

Most notably, Constellation Brands, the maker of Senior partner Ms. Harrison, QC, practises in the corporate, M&A, and Corona and Modela beers, increased its stake in securities fields. She has represented boards of directors, investment Canopy Growth by an additional $4 billion (on bankers and public corporations in M&As, prospectus offerings, private placements, take-over bids, open market transactions, acquisitions top of its acquisition of a smaller stake earlier in the of control, related-party transactions, privatizations, proxy contests year). CNBC reported: and other securities-related matters.

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“With this latest investment and the execution of some warrants, Constellation says its Heeney, Tim Goodmans LLP stake will become 38 percent of Canopy. Con- (416) 597-4195 [email protected] stellation also received an opportunity over the next three years to buy up to 139.7 million in Mr. Heeney specializes in corporate finance, M&A, securities, private equity new shares, which represents up to $5 billion and restructurings of public companies. He has represented a broad range of clients on domestic/international M&A transactions of all sizes, and in additional funding. If Constellation utilized provides advice to special committees involved in M&A and other related those warrants, it could raise its total stake in party transactions. Canopy to more than 50 percent.” “Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s Henrie, Pierre-Paul Norton Rose Fulbright Canada LLP market-leading capabilities in this space,” Constel- (613) 780-3777 [email protected] lation Brands CEO Rob Sands said in a statement. “We think the premium paid as well as the Mr. Henrie practises corporate and commercial law, with particular emphasis size of [Constellation’s] investment reflects the on matters relating to project financings, private placements, secured lending transactions, mergers & acquisitions, contract negotiations, technology long-term attractiveness of the global canna- contracting, licensing and technology-related transactions. He is managing bis opportunity,” Cowen analysts said in a note partner of the firm's Ottawa office and Ottawa chair of its business law group. We dnesday. The firm says Constellation’s expectation for the deal to be accretive by fiscal year 2021 is also encouraging. Horn, Samantha G. Stikeman Elliott LLP LaBarge Weinstein LLP acted as sole legal (416) 869-5636 [email protected] counsel to Canopy Growth Corp. with a team led by Shane McLean and Debbie Weinstein, Ms. Horn is a partner in the Mergers & Acquisitions and Private Equity and including Brigitte LeBlanc-Lapointe and Groups. Her practice focuses on mergers & acquisitions and private equity Tayyaba Khan; Davies Wa rd Phillips & Vine- and venture capital financing, including investments and buy-outs, as well as fund formation activities. She is a member of the Toronto office’s berg LLP, led by Patricia Olasker, advised Can- Management Committee and former Co-Head of the Mergers & Acquisitions opy on Competition Act and Investment Canada and Private Equity Groups. Act matters. Osler, Hoskin & Harcourt LLP represented Constellation Brands, led by Manny Pressman and James Brown. On September 5, 2018, Canopy had completed its acquisition of Hiku Brands Company Ltd. Horn, Sidney M. Stikeman Elliott LLP (Hiku) by way of plan of arrangement. (514) 397-3342 [email protected] Pursuant to the Arrangement, Canopy acquired 100% of the issued and outstanding common Mr. Horn is a senior counsel in the Corporate Group. He specializes in commercial, corporate and securities law, advising large domestic and shares of Hiku and Hiku shareholders received international corporations on complex questions concerning finance, 0.046 of a Canopy common share in exchange mergers & acquisitions and corporate governance. for each Hiku share held immediately prior to the closing. Hiku is focused on building a portfolio of engaging cannabis brands with a national retail footprint led by To kyo Smoke. Houston, Thomas A. Dentons Canada LLP Cassels Brock & Blackwell LLP acted for Can- (613) 783-9611 [email protected] opy with a deal team that included Paul Stein, Jef- frey Roy, Jamie Litchen, Jonathan Sherman and Mr. Houston advises on corporate finance, venture capital, M&A and corporate Miriam El Ofir (Securities, M&A and Cannabis), governance matters, across various industry sectors, with an emphasis on the Carla Potter (Financial Services), Ardy Moha- technology and not-for-profit sectors. He has particular expertise in technology start-ups and has assisted many companies from formation through successful jer and Kwaku Tabi (Real Estate), Chris Hersh exits. Many transactions have involved cross-border investments and acquisitions. (Competition), James Morand (Tax) and Brigeeta Richdale (Litigation). Dorsey & Whitney LLP acted as United States counsel for Canopy. Hudec, Albert J. Farris, Vaughan, Wills & Murphy LLP (604) 661-9356 [email protected] Wildeboer Dellelce LLP acted for Hiku with a deal team that included Jeff Hergott, Rob Wortz- Mr. Hudec is an M&A and corporate governance practitioner with 30+ years man, Rebecca Cochrane and Amir To rabi (Cor- experience in cross-border M&A for Canada’s resource and technology porate and Securities) and Katy Pitch (Tax). industries, securities law and board/independent committee representation. Blake, Cassels & Graydon LLP actedas Compe- He also practises extensively in Aboriginal law (commercial and benefits agreements) and deals with commercial and regulatory matters in Canada’s tition and Litigation counsel for Hiku with a deal food & beverage industry. team that included Navin Joneja and Jim Robson

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(Competition) and Sean Boyle (Litigation). Hueppelsheuser, Darren D. But there were other transactions that made the Norton Rose Fulbright Canada LLP news in the cannabis space. Particularly those done (403) 267-8242 [email protected] by Aurora Cannabis, one of the world’s largest and leading cannabis companies with sales and opera- Mr. Hueppelsheuser’s practice concentrates on income tax law, tions in 14 countries across five continents. with an emphasis on the tax aspects of financing and transaction planning for corporations and partnerships in both private and public On May 2, 2018, Aurora Cannabis completed transactions. He also advises with respect to international tax structuring its $1.23 billion (US$950 million) take-over bid of Canadian inbound and outbound investments. He regularly makes for all of the outstanding shares of CanniMed presentations on cross-border and domestic tax issues. Therapeutics Inc. In addition to product synergies and broader product portfolio, the combina- tion also provides for expanded geographies. The CanniMed Shares were acquired for consideration of approximately 72.7 million Aurora shares and $140 million in cash. The CanniMed Shares were de-listed from the To ronto Stock Exchange at the Huot, Jean Marc Stikeman Elliott LLP (514) 397-3276 [email protected] close of business on May 1, 2018. McMillan LLP acted as counsel to Aurora Mr. Huot is a partner in the Corporate Group. His practice is focused Cannabis with a team led by Desmond Balakrish- primarily in the areas of securities and mergers & acquisitions. nan and comprising Cory Kent, Leo Raffin, Paul Davis, Ravipal Bains, Leila Rafi and Kosta Kostic (Capital Markets and M&A), Herb Ono (US Hurst, Michael A. Dentons Canada LLP Securities), Geoff Moysa, Brett Harrison and (403) 268-3046 [email protected] Charlotte Conlin (Litigation), Peter Botz (Tax), François To ugas and Ryan Gallagher (competi- Mr. Hurst’s energy law expertise embraces oil & gas upstream, midstream tion), with assistance from Dorsey & Whitney and pipeline acquisitions; structuring greenfield projects; financing; and product sales arrangements. He works on infrastructure projects in Canada LLP (US Ta x and Securities). and South America. He has worked on infrastructure projects in the Western Borden Ladner Gervais LLP acted as counsel Canada Sedimentary Basin, the Canadian Arctic and offshore areas and to CanniMed Therapeutics with a team led by South America. Philippe Tardif and comprising Jason Saltzman, Andrew Powers, Mark Wheeler, Colin Cameron- Vendrig, Pierre Permingeat, Joseph Di Ponio, Rocky Swanson (Capital Markets and M&A), Jackson, Kibben Fasken Martineau DuMoulin LLP Denes Rothschild (Competition), Danny Lang (604) 631-4786 [email protected] (Tax), Jim Douglas, Cait Sainsbury, Graham Splawski and Ashley Thomassen (Litigation), with Mr. Jackson is a corporate/commercial litigator in the Vancouver office who specializes in insolvency. He is sought after for his experience in corporate assistance from Dickinson Wright LLP (US Cor- restructurings, secured creditor realization and acting for court’s officers in porate and Securities). all manner of insolvency processes. Clients appreciate his ability to guide Stikeman Elliott LLP acted a counsel to the spe- them in the face of evolving insolvency legislation and judicial developments. cial committee of the board of directors of Can- niMed Therapeutics with a team led by Donald Belovich and comprising Simon Romano, Mihkel Jenkins, William K. Dentons Canada LLP Voore, Ryan Kirvan, Logan Copen, David Tar- (403) 268-6835 [email protected] dif, Victor MacDiarmid, Spencer Burger, Peter Buckles (M&A and Securities), Peter Howard, Mr. Jenkins has a diverse transaction-based practice advising on the Samaneh Hosseini, Sinziana Hennig, Zev Smith structuring and implementation of debt and equity financings, project (Litigation), Michael Kilby (Competition) and financings, mergers & acquisitions and joint ventures. He was the presiding member of the National Partnership Board of Dentons Canada from 2009 to Dean Kraus (Tax). 2015 and participated in the formation of Dentons, serving as the first Global Not much later, on July 25, 2018, Aurora Can- Vice Chair of Dentons from Canada. nabis Inc. completed the acquisition of MedRe- leaf Corp. in a transaction valued at US$2.5 billion. The transaction was supported by certain key shareholders of MedReleaf and announced Jodoin, Claude E. Fasken Martineau DuMoulin LLP in May 2018. The friendly all-stock acquisition (514) 397-7489 [email protected] was finalized pursuant to a court ordered plan of arrangement in the Ontario Supreme Court Mr. Jodoin practises tax law, with a focus on corporate financing, financial of Justice. instruments, the purchase and sale of companies, and reorganizations. He regularly assists financial institutions during major mandates dealing The new entity has more than 1,200 employees with large public issues of securities. He also advises large national and is designed to become the largest Canadian and international public and private corporations on reorganization.

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cannabis producer with presence across Canada Johnson, Andrea C. Dentons Canada LLP and internationally. (613) 783-9655 [email protected] MedReleaf is an R&D-driven company focused on the production of top-quality cannabis and is Ms. Johnson’s practice focuses on corporate and securities law, with an Canada’s most awarded licensed producer of med- emphasis on technology and emerging growth companies. She has extensive ical marijuana. experience in the private equity and venture capital area and as lead counsel on many of the largest VC financings in Canada. She advises TSX- Aurora has established a uniquely advanced, listed companies on IPOs, financings (including PIPEs), M&A, stock-based consistent and efficient production strategy, based compensation and corporate governance. on purpose-built facilities that integrate leading- edge technologies across all processes, defined by extensive automation and customization, resulting in scale production of high-quality product at Johnson, QC, Kevin E. Norton Rose Fulbright Canada ultra-low costs. LLP (403) 267-8250 [email protected] McMillan LLP acted as counsel to Aurora Can- nabis with a team led by Desmond Balakrishnan Mr. Johnson’s practice focuses on corporate and securities law matters. He and comprising Cory Kent, Stephen Wortley, acts for issuers, shareholders, independent committees of boards of directors and investment dealers in public and private offerings of securities, related- Ravipal Bains, Michael Reid, Morgan McDon- party transactions, corporate reorganizations, mergers & acquisitions and ald, Lindsay Dykstra, Maneesha Dhaka, Brandon corporate governance and disclosure compliance matters. Deans, Sandra Zhao (Securities) with support from Herb Ono (US Securities), Peter Botz and Michael Friedman (Tax), François To ugas and Ryan Gallagher (Competition), and Brett Harri- son (Litigation). Johnston, Chip Stikeman Elliott LLP Dorsey & Whitney LLP acted as US Ta x (403) 266-9020 [email protected] counsel to Aurora Cannabis with a team led by John Hollinrake. Mr. Johnston is a partner in the Mergers & Acquisitions and Capital Markets Groups. His practice focuses on mergers & acquisitions and capital markets Stikeman Elliott LLP acted for MedReleaf financings, primarily with clients in the energy sector. He acts for financial Corp. with a team comprising Stewart Sutcliffe, and strategic investors, management teams and public companies. Sean Vanderpol, Sidney Horn, Daniel Borlack, Katarina Zoricic, Chres Lee, Billy Rosemberg, Peter Buckles and Patricia Joseph (Securities) and Dean Kraus and Jonathan Willson (Tax), Katz, Warren M. Stikeman Elliott LLP Michael Kilby and Megan MacDonald (Com- (514) 397-3260 [email protected] petition), Neil Shapiro (Real Estate), Andrea Boctor (Benefits), and Kathleen Chevalier and Mr. Katz is the Managing Partner of the Montréal office and a member of Alex Lemoine (Employment). the firm’s Partnership Board and Executive Committee. He is also the former Head of the Corporate Group. He specializes in cross-border mergers & Davies Wa rd Phillips & Vineberg LLP acted acquisitions involving both public and private companies and investment as legal counsel to shareholders of MedReleaf funds, public offerings, private placements and going-private transactions. with a team led by Patricia Olasker and including Ghaith Sibai. Lexpert® also notes that MedMen Enterprises became a publicly traded company through a re- Kauffman, Aubrey E. Fasken Martineau DuMoulin LLP (416) 868-3538 [email protected] verse take-over. OutdoorPartner Media Corpora- tion is an unlisted Canadian public company. BLG Mr. Kauffman’s practice is focused on advocacy matters related to domestic represented Eight Capital in that deal with a team and cross-border bankruptcy, insolvency and restructuring proceedings. He led by Andrew Powers that included Philippe Tar- is the director of the Insolvency Institute of Canada and past Chair of the dif, Cameron MacDonald and Ben Keen. Ontario Bar Association - Insolvency Section. He is also an Adjunct Professor of Law at Osgoode Hall Law School, where he teaches the Bankruptcy and McCarthy Té trault LLP’s Ranjeev Dhillon Insolvency Course. predicts that 2019 will see more consolidation, as companies from other sectors, and strictly cannabis companies, will need to demonstrate that they can execute on their strong business plans, or face Kellerman, Jay C. Stikeman Elliott LLP (416) 869-5201 [email protected] the threat of competition. Victor Liu, at Good- mans LLP, strikes a similar chord: there are more Mr. Kellerman is a partner and Co-Head of the Mining Group and a member refined US companies coming forward now, with of the Mergers & Acquisitions and Capital Markets Groups. He served a history of profitability. General predictions are as the Managing Partner of the firm’s Toronto office from 2012 to 2018. that marijuana will not be fully, federally legalized His clients include public companies, investment banks, investors and boards of directors. He is recognized as one of the top mining lawyers in the world in the US before the next election. But after that, by Who’s Who Legal. all bets are off.

18 LEXPERT | 2019 | WWW.LEXPERT.CA Honourable Mentions

There were many Deals from 2018 that qualified as Honour- for a purchase price of $300 million subject to certain work- able Mentions. We’ve included them here in alphabetical ing capital adjustments. The share transaction, which was order. We attempted to stick with those that met our criteria completed in connection with Toys Canada’s emergence from on closing date. The distinction between being in the Top 10 restructuring proceedings under the CCAA and Chapter 11 and Honourable Mentions reflects the Lexpert legal of the US Bankruptcy Code, has enabled Toys Canada community’s commentary. to continue as a going concern without compromising creditor claims and preserved Toys Canada’s position as Canada’s • Airbus SE, Bombardier Inc. and Investissement Québec leading toy and baby retailer. closed their C Series transaction as of July 1, 2018. By this • On July 31, 2018, Galaxy Digital Holdings Ltd. (Galaxy) transaction, Airbus acquired a majority stake in the C Series completed an arrangement transaction pursuant to which Aircraft Limited Partnership (CSALP) as was initially an- Bradmer Pharmaceuticals Inc., Galaxy Digital LP and First nounced in October 2017. Coin Capital Corp. combined to form a new enterprise in • In September 2018, ATCO acquired 40% interest in Nel- the blockchain, digital asset and cryptocurrency space. tume Ports, a leading port operator and developer in South In connection with the completion of the arrangement America, for approximately $450 million (US$340 million). transaction, escrowed funds from a previously completed Neltume Ports, a subsidiary of Ultramar, operates in 16 port subscription receipt financing of approximately $305 million facilities and three stevedoring businesses mainly situated were released to Galaxy. GMP Securities L.P. acted as sole in Chile and Uruguay. agent in the offering of subscription receipts. • As of January 2, 2019, trading began on Toronto and New • In November 2018, GFL Environmental Inc. completed its York exchanges in the shares of the new company created by merger with Waste Industries, which was valued at an enter- the merger of Barrick Gold and Randgold Resources. prise value of US$2.825 billion. • BASF announced in August 2018 that it had closed its • The Government of Canada and Canada Development acquisition of a range of businesses and assets from Bayer. Investment Corp. acquired Kinder Morgan's Trans Mountain The transaction is a strategic complement to BASF’s crop Pipeline and expansion project. This was not included in the protection, biotech and digital farming activities and marks Top 10 because there are so many questions that are unre- its entry into seeds, non-selective herbicides and nematicide solved. We intend to follow these developments in Lexpert seed treatments (this deal is in the context of Bayer’s acquisi- in 2019. tion of Monsanto). • Grande Cache Coal was acquired by CST Canada Coal Ltd. • Closing in May 2018, Blackstone Property Partners, the for US$430 million. Core+ real estate investment unit of Blackstone, and Ivanhoé • Innergex Renewable Energy Inc. completed its acquisition Cambridge, a subsidiary of CDPQ, acquired all of the issued of Alterra Power Corp. by way of an arrangement agreement and outstanding trust units of Pure Industrial Real Estate pursuant to which Innergex acquired all of the issued and Trust. Blackstone Property Partners and Ivanhoé Cambridge outstanding common shares of Alterra for an aggregate will own respectively 62% and 38% of the Trust. consideration of $1.1 billion, including the assumption • Canaccord Genuity Acquisition Corp., a SPAC, completed of Alterra’s debt. its qualifying acquisition and merged with Spark Power Corp. • METRO INC. completed its acquisition of The Jean Coutu CGAC was renamed Spark Power Group Inc. Spark Power Group, which becomes a wholly owned subsidiary of METRO, provides electrical power services and solutions to North combining all its pharmacy operations. American industrial, commercial, institutional, renewable and • NextEra Energy Partners, LP sold a portfolio of four wind agricultural customers, as well as utility markets including and two solar generation projects in Ontario to an affiliate municipalities, universities, schools and hospitals. Spark of Canada Pension Plan Investment Board ("CPPIB") Power also maintains and operates over 2,000 solar and for approximately US$1.27 billion, including assumption wind energy assets. It has over 600 megawatts of renewable of existing debt. power under management and manages two of the largest • In June 2018, Nouvelle Autoroute 30, s.e.n.c. closed a renewable energy co-ops in Canada. $1.2 billion bond refinancing for Montreal highway Autoroute • Canacol Energy Ltd. (TSX:CNE) (OTCQX:CNNEF) (BVC:CNEC) 30 (A-30) concession project. The bonds included approxi- announced in May that it had completed its offering of mately $828 million in long-term bonds, due 2042, priced US$320 million aggregate principal amount of 7.25% at roughly 4.11% and approximately $390 million in medium- senior unsecured notes due 2025. It intends to use the net term bonds, due 2033, carrying a coupon of approximately proceeds from the offering to repay all outstanding amounts 3.75%. The long-term bonds and the medium-term bonds borrowed under its credit facility. are senior-secured and consist of two classes of bonds each. • The Canadian Medical Association sold MD Financial • Novolex, a portfolio company of The Carlyle Group, Management to Scotiabank for $2.59 billion. in the packaging choice and sustainability sector, acquired • Empire acquired Farm Boy from Berkshire Partners and The Waddington Group from Newell Brands, Inc. Farm Boy’s management shareholders based on a total enter- • The Slate Canadian Real Estate Opportunity Fund I acquired prise value of $800 million. a portfolio of real estate assets from Cominar Real Estate In- • Enbridge sold a 49% interest in a portfolio of renewable vestment Trust for $1.14 billion, through Slate Asset Manage- power assets to the CPPIB for $1.75 billion. ment L.P. It includes 95 assets totalling 6.2 million square • On May 31, 2018, an affiliate of Fairfax Financial Holdings feet of office, retail and industrial properties located in the Ltd. acquired all of the share capital and business of Toys “R” Greater Toronto Area, Atlantic Canada and Western Canada. Us (Canada) Ltd. Toys “R” Us (Canada) Ltee (Toys Canada) BITCOIN TRANSACTIONS

AS CANADIAN Cryptocurrency REGULATORS AND LEGISLATORS GET Uncertainty UP TO SPEED ON CRYPTOCURRENCY IF ONLY LAW AND COMMERCE evolved in tan- TECHNOLOGY, dem, on a parallel timeline that yielded the cer- UNCERTAINTY REMAINS tainty that business craves. Unfortunately, that ABOUT HOW TO APPLY hopeful yearning — at least as it relates to the EXISTING LAWS TO IT emerging cryptocurrency conundrum — may be more wishful than ever. BY JULIUS MELNITZER In an era where rapid technological advance- ment is the order of the day — and seemingly becoming more so each and every day — the law, reactive by necessity and restrained in its development by the need for balance among competing societal forces, cannot hope to keep up. This is especially so in the early stages of progress, where lawmakers, regulators and courts can only watch as innovation lunges and lurches at its commercial promise, frequently turning to capital markets to sustain its development as it seeks the forms and outlets that will give it stabil- ity and a meaningful bottom line. It’s not surprising, then, that investor euphoria frequently reaches boiling points in regulatory vacuums, only to dampen when regulators first step in. Of necessity, these initial steps are usually tentative and transitionalmeasures aimed at the bad apples in the capital markets, but lacking the guidance that creates the certainty that propels investor confidence. In the meantime, as investors blink, the pace of innovation can suffer. So it is with cryptocurrency and its underlying blockchain plat-

form. Consider, for example, that Canada was the first nation K

to confront the legal issues surrounding cryptocurrency when it OC ST

amended its money-laundering and terrorism-financing legisla- ER tion to compel cryptocurrency dealers to register with the Finan- TT SHU

cial Transactions and Reports Analysis Centre of Canada (FIN- :

TRAC), keep detailed records and report suspicious transactions. OTO

Almost five years later, final regulations have not been published, PH

20 LEXPERT | 2019 | WWW.LEXPERT.CA LEXPERT-RANKED LAWYERS

Kelly, Stephen J. Norton Rose Fulbright Canada LLP (514) 847-4570 [email protected]

Mr. Kelly is national leader of the business law group and practises corporate and securities law. He acts for public issuers, underwriters and investors in public offerings and private placements and for parties on complex M&A. He is often called on to advise boards and independent committees on governance and strategic issues, including in the context of M&A and major compliance investigations.

Kowall, Jeffrey A. Thompson Dorfman Sweatman LLP (204) 934-2521 [email protected]

Mr. Kowall practises corporate and commercial law with extensive experience assisting clients in the mining industry, including providing advice on mineral interest tenure and the negotiation of letters of intent, purchase agreements, option agreements, supply agreements and joint-venture agreements.

Kraus, Dean Stikeman Elliott LLP (416) 869-5215 [email protected]

Mr. Kraus is a partner in the Tax Group. His practice encompasses all aspects of income taxation in corporate and commercial transactions, including domestic and cross-border mergers & acquisitions, corporate reorganizations, spin-offs, private equity investments, financings, REITs, partnerships and joint ventures.

Kravitz, Neil Fasken Martineau DuMoulin LLP (514) 397-7551 [email protected]

Mr. Kravitz’s practice focuses on mergers & acquisitions, securities law and cross-border transactions. He acts for domestic and foreign acquirers and targets, issuers, entrepreneurs, private equity funds, and investment banks with a practical, deal-oriented approach. He advises on public and private M&A transactions, equity and debt financings, shareholder activism and corporate governance.

Krawchuk, Leanne C. Dentons Canada LLP (780) 423-7198 [email protected]

Ms. Krawchuk advises mining producers in Canada on corporate/commercial, construction and procurement, corporate finance and securities, mergers & acquisitions, and other mining legal matters including the negotiation of supply agreements with electricity producers. She advises on royalties, price reviews, dedication and unitization agreements, and assignments and transfers of mining interests.

Lamonde, Sophie Stikeman Elliott LLP (514) 397-2410 [email protected]

Ms. Lamonde is a partner and head of the Montréal office’s Mergers & Acquisitions Group, as well as a member of the firm’s Partnership board. Her practice is directed primarily to the areas of mergers & acquisitions and private equity, with a focus on cross-border transactions.

WWW.LEXPERT.CA | 2019 | LEXPERT 21 LEXPERT-RANKED LAWYERS

the rules have not yet come into force and may not Lampe, Jonathan Goodmans LLP come into force until 2020. (416) 597-4128 [email protected] Even core questions about the nature of blockchain assets remain unanswered. Mr. Lampe is a member of the firm’s Executive Committee and Past “We still don’t have a formal position by several Co-Chair of its Corporate/Securities Practice. Former OSC General regulators as to the nature of digital assets and Counsel, he advises Canadian and international clients on M&A, strategic relationships, financings, dissident shareholder activities and governance, whether or when blockchain-based offerings such and regulatory matters and investigations. Advanced Leadership Fellow as tokens are securities as opposed to currencies,” at Harvard University in 2016. says Usman Sheikh in Gowling WLG’s Toronto office. “If there’s a lack of clarity on this most basic issue, we can see how uncertainty continues to Lastman, CM, Dale H. Goodmans LLP reign in many areas of the law.” (416) 597-4129 [email protected] It is true that 2018 saw domestic and foreign regulators take longer, harder looks at crypto- Mr. Lastman, Member of the Order of Canada, is Chair of Goodmans LLP. currency regulation and enforcement. In 2018, He provides counsel in connection with public offerings, M&A and business both the Canadian Securities Administrators restructurings. He is a Director of Maple Leaf Sports & Entertainment Ltd., Alternate Governor for the NHL and NBA, and Governor of the CFL’s Toronto (CSA) and the US Securities and Exchange Argonauts. He is Chair of Baycrest and board member of RioCan REIT, Commission (SEC) confirmed that most ini- Roots Ltd. and CAMH Foundation. tial coin offerings (ICOs) were subject to their jurisdiction. Later in the year, both regulators cautioned stakeholders about the potential Latham, L. Joseph Goodmans LLP unlawfulness of online platforms for trading (416) 597-4211 [email protected] digital assets. The CSA also issued a staff notice emphasizing the importance of token purchas- Mr. Latham’s practice focuses on commercial insolvencies, including ers’ reasonable expectation of profit in acquiring bankruptcies, receiverships and restructurings, having advised debtors, tokens as a sign that the ICO was an investment secured/unsecured creditors, receivers, trustees and monitors. He has experience in Canadian and cross-border restructurings and receiverships, contract subject to securities laws. including Sears Canada, Performance Sports, Essar Algoma Steel, HB White, There’s little doubt that the increasingly fo- Quicksilver Resources and Eddie Bauer. cused regulatory atmosphere and the accom- panying investor uncertainty — both of which represent a moving dot on the continuum from the “Wild West” atmosphere that prevailed to Leduc, Pierre-Yves Stikeman Elliott LLP propel Bitcoin to a market high near $20,000 in (514) 397-3696 [email protected] December 2017 — is at least partially responsible for the fall in Bitcoin’s value to about $3,600 Mr. Leduc is a partner and Head of the Securities Group. His practice in January 2019. focuses primarily in the areas of mergers & acquisitions (public and private), securities and corporate finance. His assignments have included acting “We were taking three calls a day in this as counsel to issuers and underwriters in public offerings and private space until about June 2018, when the OSC is- placements and to corporations in acquisitions and divestitures. sued Staff Notice 46-308, which essentially said that almost all token offerings would be treated as securities,” says Allan Goodman in Good- mans LLP’s Toronto office. “A fter that, interest dropped off tremendously.” In other words, the regulatory action that has Leopold, John W. Stikeman Elliott LLP been taken to date may have done more to fray in- (514) 397-3111 [email protected] vestors’ nerves as opposed to quelling them. “The guidance given so far hasn’t been particu- Mr. Leopold is a preeminent corporate lawyer who has been repeatedly recognized both nationally and internationally as one of Canada’s elite larly helpful,” Goodman says. “It’s true that the practitioners in mergers & acquisitions and corporate law. regulators have been going after the bad actors, but the vast majority of stakeholders, who aren’t in that category, are still waiting for authorities to come out with formal policies and rules.” Levin, Jon Fasken Martineau DuMoulin LLP (416) 865-4401 [email protected] Daniel Fuke in Fasken Martineau DuMoulin LLP’s Toronto office maintains that regulatory Mr. Levin has an unmatched reputation for providing top-level advice. postures so far have amounted to little more than An advocate of exemplary client service, he has acted as lead counsel in a knee-jerk initial reaction that securities laws ap- high profile financings, take-overs and restructuring transactions. He has ply to cryptocurrency offerings. advised special committees and has provided strategic guidance on board procedures and the implementation of governance policies in response “A ll the regulators have done is punt the ques- to new legislation and developments. tion of when a token is a security,” he says. “On

22 LEXPERT | 2019 | WWW.LEXPERT.CA LEXPERT-RANKED LAWYERS

the whole, there is absolute acknowledgement in industry circles that a token will often be a secu- Lewis, QC, Gregory D. Norton Rose Fulbright Canada rity, but at the same time there’s a significant space LLP (604) 641-4923 [email protected] in which a token could be a currency or a utility.” As it turns out, the idea that a unit of exchange Mr. Lewis is Canadian Head of Infrastructure and former Chair of the Business can take different forms is not a unique concept. Department of the predecessor firm in Vancouver. His practice focuses on commercial transactions and project financings in infrastructure, energy and US dollars or any other established international other industry sectors. His experience includes PPPs in a variety of sectors, monetary units could be currency for people who purchases and sales of businesses and related financings, port developments use it to pay for goods and services at the same time and hydro-electric power projects. that they represent a securities investment for those participating in the currency exchange market. As well, and perhaps more importantly — Linett, Amanda Stikeman Elliott LLP because cryptocurrency’s potential as a ubiqui- (416) 869-5217 [email protected] tous decentralized currency has many naysay- ers — part of cryptocurrency’s uniqueness is Ms. Linett is a partner in the Mergers & Acquisitions and Capital Markets in creating economic incentives to participate Groups. Her practice focuses on corporate and securities law, with an emphasis on mergers & acquisitions and corporate finance transactions. in a platform that benefits the whole network. She has counselled issuers, boards of directors, special committees and Bitcoin, for example, uses cryptocurrency to re- other transaction participants in numerous M&A transactions, including both ward “miners” who provide network security by friendly and hostile matters. validating transactions. Interestingly, it’s a Canadian company, Water- loo-based Kik Interactive, that may be the first to Lorito, John G. Stikeman Elliott LLP have the US courts pronounce on the character- (416) 869-5272 [email protected] ization of cryptocurrency. After the OSC came to a preliminary conclusion that the company’s Mr. Lorito is Head of the Tax Group and a member of the Toronto Management 2017 offering of about $100 million in digital to- Committee. His practice focuses on general income tax, with particular emphasis on corporate reorganizations, mergers & acquisitions, investment kens constituted a securities offering, Kik decided funds, REITs and international tax planning. He has also acted as counsel on to limits its offerings to the US. But when the federal and provincial income tax appeals before the Federal Court of Appeal SEC came to the same conclusion as its Canadian and the Ontario Court. counterpart, Kik advised that any enforcement action would be challenged in the US courts. “It’s important for the industry that regulators’ MacKay, Kari Goodmans LLP interpretations of the law are being challenged,” (416) 597-6282 [email protected] Fuke says. “The SEC’s test for whether an offering is a ‘security’ is outdated and didn’t contemplate Ms. MacKay practises corporate/securities law focusing on M&A, corporate the emergence of digital assets when the test was finance and governance. She advises on international mergers, asset transactions and multi-creditor financings focused on the mining and natural formulated. This challenge is clearly needed.” resource sector. She has extensive experience at all project stages, project Kik’s position is that the tokens are intended financing (alternative financing), technical reporting, off-take agreements for use as a currency on its platform, a social net- and asset dispositions. working enterprise aimed at interconnecting a variety of third-party apps that integrate Kik’s mes- saging app into their software. Services that do so MacKay-Dunn, QC, R. Hector Farris, Vaughan, Wills or otherwise promote Kik’s app will be rewarded & Murphy LLP (604) 661-9307 [email protected] in “Kin,” digital tokens that can then be spent in the interconnected network. Mr. MacKay-Dunn has over 25 years of experience providing legal advice According to Fuke, the company has strong to high-growth public and private companies, many achieving valuations of supporting arguments for its position that Kin to- over a billion, over a broad range of industry sectors, including technology, life sciences, mining, and compostable technology. He advises on corporate kens are not securities, including the fact that only domestic and cross-border public and private securities offerings, small amounts were sold to individual purchasers. M&A and international partnering and licensing transactions. “Kik wants people to spend Kin and circulate it in the network,” Fuke says. “It’s not intended as an appreciating investment nor does Kik intend Mann, Jonah Stikeman Elliott LLP to be responsible for anyone else’s money.” (416) 869-5518 [email protected] Vern Krishna, a tax lawyer at TaxChambers LLP in Toronto, says tax authorities are no fur- Mr. Mann is a partner in the Mergers & Acquisitions and Capital Markets ther along than their securities brethren. But un- Groups. His practice focuses on mergers & acquisitions, corporate finance, like many securities lawyers, he believes that cryp- corporate governance and securities law compliance matters. He regularly acts for Canadian public companies and leading investment banks tocurrency should be treated as a speculative com- on complex capital markets transactions. In 2018, he was recognized modity rather than a currency for tax purposes. as a Lexpert Rising Star.

WWW.LEXPERT.CA | 2019 | LEXPERT 23 LEXPERT-RANKED LAWYERS

“It’s a sinkhole that no one knows anything Mariage, Frank Fasken Martineau DuMoulin LLP about, a highly risky commodity in respect of (514) 397-7540 [email protected] which gains or losses should be treated as income rather than capital,” he says. “I don’t see any new Mr. Mariage practises in the areas of securities, corporate law and mining principle emerging from this particular asset.” law. Over the course of his career, he has developed legal expertise on Despite the uncertainty, however, pretty well mining issues. He represents mining companies and guides them during the discovery, sale, and processing of mineral deposits, in Canada and everyone interviewed agreed that good regulation elsewhere. He specializes in the legal issues and challenges faced by takes time. mining companies. “We’re dealing with novel and complex developments,” Sheikh says. “Regulators and legislators need time to get up to speed on exactly what this Martel, Guy P. Stikeman Elliott LLP technologyis about and how to apply existing laws (514) 397-3163 [email protected] to it.” Compounding the problem is the shifting land- Mr. Martel is a partner in the Litigation & Dispute Resolution Group, scape. “The markets have been changing so rapidly specializing in banking and restructuring. He has actively participated in the that it’s difficult for anyone to catch their breath representation of lenders, borrowers and investors in Canadian, cross-border or foreign matters. He often acts as legal advisor for lending institutions and figure out rules that meet everyone’s needs,” and companies that specialize in the restructuring and sale of financially Fuke says. troubled businesses. Meanwhile, it’s not as if securities regulators are standing still. Apart from the guidance that securities regulators have offered, the CSA has estab- Massé, David Stikeman Elliott LLP lished its RegulatorySandbox, aimed at gaining “a (514) 397-3685 [email protected] better understanding of how technology innova- tions are impacting capital markets, [at assessing] Mr. Massé is a partner in the Corporate Group. He specializes in mergers the scope and nature of regulatory implications & acquisitions, capital markets and securities. He has been counsel to and [at determining] what may be required to sellers, purchasers and financial advisors in various mergers, acquisitions, divestitures, spin-offs and reorganizations. He also frequently acts as modernize the securities regulatory framework.” counsel to issuers and underwriters in public and private domestic and Several provincial commissions also have dedi- international offerings. cated teams to help startups. To its credit, the Regulatory Sandbox has been the conduit through which authorities have provided exemptive relief to two token offerings and Mathieu, Frank Stikeman Elliott LLP allowed four registered firms to act as investment (514) 397-2442 [email protected] fund managers for a private cryptocurrency investment fund. Mr. Mathieu is a partner and Head of the Montréal office’s Tax Group. He Arguably, however, CSA members haven’t gone specializes in Canadian income tax law, including income tax aspects of Mergers & Acquisitions, and Corporate Reorganizations and Restructurings quite as far as other regulators in soothing crypto- in a cross-border context. He has extensive expertise advising foreign private currency startups and potential investors. equity funds in relation to their Canadian investments. “FINTRAC will answer certain questions, the SEC will issue ‘no action letters’ and the Canada Revenue Agency has long issued advance rulings,” Fuke notes. Matlow, David J. Goodmans LLP In response, CSA spokesperson Ilana Kelemen (416) 597-4147 [email protected] advises that “our views on/approach to the cryptocurrency space are in line with most interna- Mr. Matlow practises corporate finance/securities, private-equity and M&A law. tional regulators.” He acts for public and private companies in a range of transactions, including But CSA, through Kelemen, offered little in financings, fund formation, initial public offerings, regulatory matters and divestitures. He also acts for a number of private equity firms in their investing the way of assuring investors that greater certainty activities. He is the Chair of the Jewish Foundation of Greater Toronto. is on its way. “The CSA continues to closely monitor the regulatoryissues surrounding cryptocurrencies in Canada,” she wrote in an email. “We continue to May, Neill I. Goodmans LLP (416) 597-4187 [email protected] assess the scope and nature of regulatory implications, and review applications from businesses in Mr. May focuses on all aspects of corporate/securities law, with emphasis the cryptocurrency sector that are subject to secu- on M&A, private equity, and public and private financings. He is Co-Chair rities law.” of Goodmans’ Corporate Securities Group and a former member of the TSX As Krishna sees it, that’s not surprising. Listing Advisory Committee and the OSC’s Securities Advisory Committee and Small Business Advisory Committee. Former Adjunct Professor at the “Government and regulators rarely lead,” he University of Toronto, Faculty of Law. says. “They’re more inclined to follow.”

24 LEXPERT | 2019 | WWW.LEXPERT.CA Protecting Canadian Directors: The Role of D&O Insurance

This article highlights some of the key points that Canadian corporate directors need to keep in mind as they consider the adequacy of their Directors and Officers (“D&O”) liability coverage in Canada’s increasingly litigious environment.

Courtney Wilson While D&O policies are generally Partner, tailored to each company’s needs, there Download Stikeman Elliott’s Stikeman Elliott LLP are certain common issues on which Directors and Officers directors should focus as they assess the in Canada guide at [email protected] adequacy of their coverage. Six of these +1 416 869 6847 are discussed below, with additional stikeman.com/directors information available in the publications mentioned at the end of this article. D&O insurance exists because all corporate directors are potentially 1. Severability subject to personal liability claims, not New directors are typically added only for their own conduct as board to an existing group D&O policy members (e.g. conflicts of interest) but that was issued on the basis of an — in some cases — for the company’s application submitted by existing or conduct (e.g. with respect to taxation past directors. Because the insurer and environmental issues). is often permitted to rescind a policy Should a claim arise, a director should on the basis of inaccuracies in the 5. Insolvency first refer to the indemnification application form, this means that a new Directors should consider how their provisions under Canada’s corporate director could theoretically lose their policies deal with insolvency situations, laws, the corporation’s organizational coverage because of someone else’s including general carve-outs that may documents and any contractual misstatements. To prevent this, many permit their insurer to cancel coverage agreements in place between the D&O policies include a “severability” on insolvency or bankruptcy. director and the corporation. This will clause that limits denials of coverage on help to determine what, if any, legal this basis to board members who knew 6. Top-up policies obligations the corporation has to of the misstatements. D&O insurance is purchased in towers. compensate the director with respect In other words, there is a primary policy to the claim. The director should also 2. Dilution that is supplemented by multiple levels familiarize themself with the scope of D&O insurance policies often cover not of excess insurance coverage that can any D&O insurance policies that the only the directors and officers but also be used as back-up. The corporation’s corporation has in place, which policies the corporation itself. Because each suite of insurance can almost always be may be used by the corporation both policy is capped at a certain aggregate topped-up — for a price — by obtaining to satisfy any of its legal indemnification amount, it is important from a director’s additional coverage from another obligations discussed above and to standpoint that the policy clearly gives provider. A new director concerned compensate directors for claims that the Side A coverage precedence, with about the level of coverage in the may in fact be above and beyond any respect to payouts, over the Side B and current policy may wish to request this. such obligations. Side C coverage. D&O insurance coverage comes in several distinct types. The main category 3. Former and related directorships For further information that is personally relevant to directors The definition of “insured person” is “Side A” coverage, which is directly will typically include former directors. Stikeman Elliott’s publication Directors available to directors for matters that Those who also serve on the boards of and Officers in Canada is available to the corporation is not legally required subsidiaries or affiliates should confirm provide additional information on D&O to indemnify. In addition to this, there is that they are also covered in those roles. insurance, visit stikeman.com/directors also “Side B” coverage, which reimburses Our complete library of publications the corporation for amounts paid as 4. Exclusions is available on our Knowledge Hub at indemnification to directors or corporate D&O policies generally contain exclusions stikeman.com/kh officers and is more traditionally used for fraud, dishonesty or criminal conduct. to cover matters that the corporation While these may broadly speaking be is legally required to indemnify. Lastly, non-negotiable, there may be aspects of “Side C” or “entity” coverage is also them that are important to discuss (e.g. available to corporations to assist them from a director’s perspective, the insurer when they are sued alongside their should not be able to deny coverage directors and officers. simply on the basis of an allegation). Stikeman Elliott LLP / stikeman.com INSOLVENCY REGIME

Insolvency Becomes Customized

IT’S BEEN CALLED a “bespoke solution” to insolvency proceedings: Canada’s Companies’ Creditors Arrangement Act (CCAA) or, indeed, “Canada’s other insolvency proceedings.” Canadian insolvency lawyers call it more flexible than other international regimes, and more principles- rather than PRACTITIONERS SAY rules-based, allowing for faster and more ef- THE FLEXIBILITY AND ficient outcomes. PRACTICALITY OF THE “The Canadian Act [has] an important sec- COMPANIES’ CREDITORS tion that says a judge can make any order that ARRANGEMENT he or she sees fit, [that] she thinks appropriate ACT LEADS TO in the circumstances,” says Robert Thornton FASTER AND MORE of Thornton Grout Finnigan LLP in Toron- EFFICIENT OUTCOMES to, a boutique firm practising exclusively in FOR INSOLVENCY the areas of litigation and restructuring. PROCEEDINGS K By comparison, says Thornton, the US OC BY ELIZABETH RAYMER ST

bankruptcy system “has developed over many ER decades, and is now, I believe, thousands of TT SHU

sections and subsections long, and if you can’t :

fit within a particular section or subsection, then the idea is that it OTO

can’t be done. The philosophy behind the two regimes are dramati- PH

26 LEXPERT | 2019 | WWW.LEXPERT.CA LEXPERT-RANKED LAWYERS

McGlaughlin, Grant E. Fasken Martineau DuMoulin LLP (416) 865-4382 [email protected]

Mr. McGlaughlin is head of Fasken’s Private Equity Group and practises in the areas of mergers & acquisitions, private equity, corporate finance, governance and sensitive and complex transactions. He provides expert legal advice to public and private issuers, underwriters and private equity funds in a broad range of industries including mining and natural resources, technology and industrial.

McNary, QC, CD, ICDD, Carman R. Dentons Canada LLP (780) 423-7236 [email protected]

Mr. McNary practises primarily in the areas of taxation and corporate law, with emphasis on tax compliance and dispute resolution with government agencies, and on corporate tax strategies, structures and governance of tax risk. He was Managing Partner of Dentons’ Edmonton office from 2014 to 2017. He is also an experienced Director and Chair and advises Boards and organizations on strategy.

Nawata, Denise Farris, Vaughan, Wills & Murphy LLP (604) 661-1746 [email protected]

Advising both public and private companies, Ms. Nawata has experience in a broad range of domestic and cross-border transactions including mergers & acquisitions, plans of arrangements and other corporate reorganizations and debt and equity financings.

Newby, Bradley A. Farris, Vaughan, Wills & Murphy LLP (604) 661-9308 [email protected]

Mr. Newby is a Partner whose practice focuses on corporate commercial, M&A, corporate finance & securities, and corporate governance law. He has experience advising corporations, private equity firms, professional managers and entrepreneurs on a wide range of complex business transactions.

Ng, Wesley Stikeman Elliott LLP (416) 869-5218 [email protected]

Mr. Ng is Head of the Technology Group and Chair of the Diversity Committee in the Toronto office. His practice focuses on information technology, e-commerce, and biotechnology transactions, as well as privacy-related matters including compliance with Canada’s new anti-spam legislation (CASL).

Nigro, Mario Stikeman Elliott LLP (416) 869-6810 [email protected]

Mr. Nigro is a partner in the Mergers & Acquisitions and Private Equity & Venture Capital Groups. His practice focuses on business law, including acquisitions, dispositions, and reorganizations. He has extensive experience working with private equity and venture capital firms on numerous acquisitions and dispositions.

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cally different.” In November 2016, Pacific Exploration and Nixon, Christopher W. Stikeman Elliott LLP Production Corp., a Canadian company that (403) 266-9017 [email protected] was the largest non-state oil producer in Latin America, announced it had successfully imple- Mr. Nixon is a partner in the Capital Markets and Mergers & Acquisitions mented a restructuring plan under the CCAA, Groups and Head of the China Group. His practice focuses on business law, with an emphasis on mergers & acquisitions, corporate finance, even though it largely operated in Colombia. This joint ventures, private equity, corporate and trust reorganizations was novel in Colombia, says Melaney Wagner, a and corporate governance. partner in the Corporate Restructuring Group at Goodmans LLP in Toronto, as “Colombia recognition proceedings had never been used with the Nordick, D’Arcy Stikeman Elliott LLP CCAA” before. (Goodmans was counsel to the (416) 869-5508 [email protected] ad hoc noteholders in the proceedings.) However, she says, a unique feature of the Mr. Nordick is Co-Head of the Capital Markets and Public Mergers & CCAAproceedings is the court-appointed moni- Acquisitions Groups in Toronto. He is also a member of the Mining and tor, who in this case built a connection with the Financial Products & Services Groups. His practice focuses on M&As (public and private), corporate finance and governance, securities, financial office of the superintendent of bankruptcy in Co- products, licensing and joint ventures, project development, restructuring, lombia and worked closely with it. This avoided and corporate and commercial law. Pacific being taken over by the superintendent, says Wagner. The court-appointed monitor “was instrumental …, so because of that, and all of the O’Neill, Brendan Goodmans LLP flexibility under our statute, the Pacific [restruc- (416) 849-6017 [email protected]

Mr. O’Neill focuses on cross-border and transnational insolvencies and restructurings, bankruptcy-based acquisitions and near-insolvency investing “OUR REGIME HAS A LOT scenarios. He represents debtors, creditors, committees, noteholders and TO COMMEND IT. BUT CLIENTS other stakeholders. Recent mandates include Lone Pine Resources, Pacific IN PARTICULAR ARE RELUCTANT Exploration, Lightstream Resources, Banro Corporation, Tervita, Concordia TO GO INTO AN UNCERTAIN REGIME and Carillion, among others. AS OPPOSED TO ONE [SUCH AS THE US REGIME] WHERE THEY CAN PREDICT THE RESULT — EVEN IF IT Orr, William K. Fasken Martineau DuMoulin LLP TAKES LONGER AND COSTS MORE.” (416) 865-4360 [email protected] - ROBERT THORNTON, Mr. Orr focuses his practice on corporate governance in acting for boards THORNTON GROUT FINNIGAN LLP of directors and independent committees of boards. He is recognized in Canadian and international directories for expertise in public & private financings, private placements, take-over bids, M&A, going-private transactions, corporate governance, restructurings, and stock exchange turing] was completed in a time-effective and and securities enforcement issues. cost-efficient manner.” In June 2017 the company changed its name to Frontera EnergyCorp. and is listed on the TSX. While insolvency lawyers don’t see a general Paré, Robert Fasken Martineau DuMoulin LLP (514) 397-7517 [email protected] swing to using the Canadian insolvency regime in international restructurings, they see its advan- Mr. Paré has been practising in the areas of corporate governance, mergers tages and aren’t surprised when it is favoured over & acquisitions and securities for more than 30 years. He has extensive other regimes. experience and was responsible for handling the legal aspects of a number “Our regime has a lot to commend it,” says of transactions that have marked the Canadian economic landscape. He is recognized for his ability to handle multi-faceted files, particularly in relation Thornton. “But clients in particular are reluctant to take-over bids. to go into an uncertain regime as opposed to one [such asthe US regime] where theycan predict the result — even if it takes longer and costs more.” Perhaps the greatest foreign player in Canadian Partridge, Michael Goodmans LLP insolvencyproceedingsisthe UnitedStates,where (416) 597-5498 [email protected] investors are often located. The US Bankruptcy Code is more codified and rules-based, insolvency Mr. Partridge’s practice focuses on corporate finance, mergers & practitioners agree, thoughone that allows players acquisitions, private-equity transactions and securities law, including in the to show up at the last minute, on the courthouse areas of mining and natural resources. His clients include Aquila Resources Inc., Industrias Peñoles, S.A.B. de C.V., a subsidiary of Grupo Bal, Mandalay steps, to make a deal; it’s described as results- rath- Resources Corporation and CE Mining Limited. er than principles- and process-driven.

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“The Canadian system is more flexible and practical,” says Alex MacFarlane, a partner in Pasquariello, Joe Goodmans LLP Borden Ladner Gervais LLP’s Toronto office (416) 597-4216 [email protected] and national co-chair of BLG’s Insolvency & Restructuring Group. “It leaves more discretion Mr. Pasquariello focuses on corporate restructuring, bankruptcy and with the sitting judge and allows others to come insolvency litigation. He represents key parties in high profile and complex domestic, cross-border and international matters, including Nortel and up with solutions.” Carillion. He is recognized as a leading insolvency/restructuring lawyer by However, he says, “the systems work pretty various guides, chairs industry seminars and is a member of the Insolvency smoothly together.” Institute of Canada, and INSOL. Wagner agrees that “the CCAA is a lean and flexible statute with fewer codified rules,” which allows courts to adapt to unique circumstances. Perry, Chrysten E. Stikeman Elliott LLP “We aren’t tied to a lengthy code, like the US (403) 266-9010 [email protected] Bankruptcy Code, and multiple first-day papers and motions that significantly increase the cost of Ms. Perry is Managing Partner of the Calgary office, Co-Head of the Energy the proceedings,” she says. “Under our CCAA, we – Oil & Gas Group and a member of the Partnership Board. She has over 30 years’ experience practising corporate and commercial law related to oil have one initial order that covers all first-day re- & gas projects, spanning a number of industry sectors including lief” in proceedings. “And that’s based on a model conventional petroleum and natural gas, LNG, NGLs, heavy oil, shale order that was developed with the assistance of and coal-bed methane. our judges and the insolvency Bar for efficiency. “Relief after the first day is driven by principles as opposed to rigid rules,” Wagner adds. There is more flexibility under the inherent jurisdiction Perry, QC, F. Brent Felesky Flynn LLP of the CCAA courts for third-party releases, and (403) 260-3306 [email protected] which are sometimes key to resolution of a case. “We don’t have unsecured creditors’ committees Mr. Perry is a Governor (former Chair) of the CTF whose practice covers a broad spectrum of business and personal tax planning, with a particular that are statutorily mandated and very active in focus on financings, M&A, divestitures, corporate and trust structuring and the United States that can lead to increased costs international tax planning, as well as representing clients in disputes with and lengthier proceedings,” she says. What the CRA. He has authored papers and lectured for many organizations. CCAA provides for is a court-appointed monitor to look out for the interests of stakeholders in a fair and efficient manner. Pillon, Elizabeth Stikeman Elliott LLP Challenges can arise when a Canadian com- (416) 869-5623 [email protected] pany is a debtor in processes under Chapter 11 of the US Bankruptcy Code and in Canada under Ms. Pillon is a partner in the Litigation & Dispute Resolution Group the CCAA, she says. “It’s more cumbersome and and Head of the Restructuring & Insolvency Group in Toronto. Her practice focuses on commercial litigation. Her restructuring and insolvency practice you’re trying to meet both sets of rules, which are involves Ontario-based restructurings, Companies’ Creditors Arrangement not the same.” If there is a conflict between the Act, Receivership and Bankruptcy proceedings and cross-border two regimes, the Canadian company that files in insolvency proceedings. both jurisdictions may be disadvantaged by the more rigid US regime. For this reason, Wagner says her firm typically advocates for concurrent proceedings whereby a corporation with legal entities in both Canada Pincus, Stephen N. Goodmans LLP and the US has its Canadian companies file pro- (416) 597-4104 [email protected] ceedings in Canada and its US companies in the United States. She gives the example of Golf Mr. Pincus is widely recognized as one of Canada’s leading M&A and capital markets lawyers. He has played a leadership role on many landmark Town, owned and operated by Golfsmith Inter- transactions, and has pioneered the development of Canadian REITs, national Holdings Inc. of Austin, Texas. While SPACs, income funds, and domestic and cross-border IPOs. very few locations were closed in Canada, almost all locations in the US were closed down, she says. The US and Canadiancompanies were in a shared credit facility and the US operations were in dire Pukier, Brian M. Stikeman Elliott LLP straits. The proceedings ran separately, in two ju- (416) 869-5567 [email protected] risdictions and under two regimes. This meant that US trade creditors didn’t get Canadian as- Mr. Pukier is a partner in the Mergers & Acquisitions Group. His practice is sets; rather, the Canadian assets got to those cred- focused primarily on cross-border M&A, private equity investments, corporate finance transactions, complex corporate reorganizations and public policy. itors, and the Canadian operations continued. He has extensive experience in counselling senior management and the The restructuring of Target Canada also used boards of directors of leading public and private corporations.

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Rajpal, Deepak (Dee) Stikeman Elliott LLP (416) 869-5576 [email protected]

Mr. Rajpal is a partner in the Mergers & Acquisitions, Capital Markets and Securities Groups. His practice focuses primarily on mergers & acquisitions, corporate finance, corporate governance, restructuring, proxy disputes and compliance matters with an emphasis on cross-border and international transactions.

Raymond, Paul Norton Rose Fulbright Canada LLP (514) 847-4479 [email protected]

Mr. Raymond has a wide-ranging domestic and international experience, principally in the United States, Europe and emerging markets. He is experienced in corporate and securities law, financings and business acquisitions and sales. He has acted in various transactions for the purchase “THE CCAA IS A LEAN AND or sale of businesses, as well as in mergers and reorganizations. FLEXIBLE STATUTE WITH FEWER CODIFIED RULES. WE AREN’T TIED TO A LENGTHY CODE, LIKE THE US Romano, Simon A. Stikeman Elliott LLP BANKRUPTCY CODE, AND MULTIPLE (416) 869-5596 [email protected] FIRST-DAY PAPERS AND MOTIONS THAT SIGNIFICANTLY INCREASE Mr. Romano is a partner in the Capital Markets and Mergers & Acquisitions THE COST OF THE PROCEEDINGS.” Groups. His practice focuses on securities, public and private M&As and corporate finance. He advises public companies, financial institutions, - MELANEY WAGNER, GOODMANS LLP underwriters, investment funds, private equity funds, real estate investment trusts and income trusts, alternative trading systems and regulatory and self-regulatory organizations. the CCAA, she says (Goodmans acted for the court-appointed monitor), and although there was initial trepidation, as Target US was the parent, Rosenberg, Ken Paliare Roland Rosenberg the restructuring was a success.“That planreceived Rothstein LLP (416) 646-4304 [email protected] virtually unheard-of approvals,” says Wagner. As head of the Restructuring & Insolvency Mr. Rosenberg’s litigation practice focuses on commercial, corporate, group in Calgary for Blake, Cassels & Graydon shareholder, regulatory and insolvency/restructuring disputes. He also acts as a mediator and has acted as counsel to a wide range of stakeholders, LLP, Kelly Bourassa has handled parallel and including debtors, secured and unsecured creditors, pension plans, unions, other proceedings on both sides of the Canada/ class action plaintiffs, court officers and public/government authorities. US border. Canadian and US proceedings, despite their differences, do have a lot of similarities, she says. “They still have the same underlying concepts of debtor in possession, restructuring and Roth, Bernard J. Dentons Canada LLP (403) 268-6888 [email protected] the idea that creditors can be compromised. “In the French sauvegarde regime, it becomes Mr. Roth’s practice is focused on energy regulatory law and includes the very interesting because even where there is not regulation of infrastructure, including environmental assessment processes, enough money to pay all the creditors, sharehold- as well as all required environmental and regulatory approvals. He has ers still get a vote,” she says, “which is completely significant expertise in utility regulation, including in appeals or judicial review applications to courts from regulatory decisions, as well as tolls/tariff averse to what would be accepted in Canada and and rates matters. in the US, where we both have the view that equity claims have to come behind debt.” In 2015 and 2016, Bourassa handled two “very similar” restructuring cases involving Canadian Roy, André J. Stikeman Elliott LLP entities with US assets. One case, Parallel Energy, (514) 397-3119 [email protected] involved parallel proceedings, while the second, Argent Energy, engaged the CCAA in Canada Mr. Roy is a partner and member of the Corporate Group. He served on the and Chapter 15 proceedings in the US (recog- Board and Executive Committee of the firm and was the Managing Partner nition proceedings under the US Bankruptcy of the firm’s Montréal office for nine years (2009–2018). His expertise and experience is focused in the areas of private and public financing, cross- Code). The Parallel case is still not fully resolved, border transactions, public and private M&A, and corporate governance. she says; however, the second case, which was

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started in February 2016, was fully resolved by the end of the year. Roy, Christian B. Norton Rose Fulbright Canada LLP “So there’s the ability to run a much quicker (418) 640-5028 [email protected] process under the CCAA,” Bourassa says. Bourassa has seen great success, she says, with Mr. Roy is local chair of the litigation group in the Québec office. His CCAAproceedingswith Chapter 15 proceedings practice focuses primarily on corporate restructuring, bankruptcy, insolvency and realization of bank guarantees. His services are often retained by in the US. “From my own experience, we’ve been companies with restructuring needs and by court-appointed officers, financial able to incorporate the Canadianprinciples” espe- institutions, secured and unsecured creditors and purchasers of assets from cially in cases where there are not enough assets distressed companies. to pay secured creditors, as Canadian proceedings value them more. “In a few cases … it allowed us to avoid some of the rules that would be common- place in a Chapter 11 proceeding, because they’re Rubenstein, Gale Goodmans LLP not part of the Canadian regime. So we’ve been (416) 597-4148 [email protected] able to streamline the US proceedings.” Other foreign jurisdictions can come into play Ms. Rubenstein’s practice focuses on the areas of commercial insolvency, restructuring and pensions, with an emphasis on financial institutions both in international restructurings, sometimes with domestic and international, including life insurers, property and casualty struggles to coordinate regimes. MacFarlane re- insurers and deposit-taking institutions. She also advises on pension and calls the winding up of the business of Maple employee matters to a diverse clientele, and is a director of Hydro One. Bank GmbH in Canada. It was the first autho- rized foreign bank liquidation in Canada and was liquidated by German regulators, he says. Sananes, Solomon Norton Rose Fulbright Canada LLP “We had two different systems; in Canada, (514) 847-4411 [email protected] it was the Winding-up and Restructuring Act, but the Germans wanted to apply their system Mr. Sananes practises in the area of corporate finance and securities in Canada,” he says. Borden Ladner Gervais, (including both private placements and public financings), mergers & acquisitions, and corporate governance. In corporate financing, he acts in acting for the liquidator, was adamant that the numerous Canadian and Canadian/US cross-border offerings of debt, equity CCAA should be used. “We ended up working and derivative instruments on behalf of issuers, selling shareholders out a protocol with the Germans, so the two sys- and underwriters. tems did work in the end, and quite effectively. But you just have to work out a protocol, and that’s what largely happens between US cases Sanderson, QC, Chris W. Lawson Lundell LLP and Canadian cases: that the lawyers, monitor, (604) 631-9183 [email protected] judges work out a cross-border protocol that helps run the two cases smoothly.” Mr. Sanderson focuses on regulation and government relations regarding Several international cases involving mining project development and transportation infrastructure primarily in the energy sector. Clients include utilities, pipelines, shippers and governments. He companies have used the CCAA regime, includ- has appeared frequently before diverse energy regulators and at all levels of ing Crystallex International Corporation, he Courts including the Supreme Court of Canada. He is a Director of BC Hydro says. Crystallex has operations in Venezuela and and Power Authority. chose Canada to restructure; “that’s still ongoing.” Great Basin Gold Limited also restructured in Canada; based in Vancouver, it has mining as- Scott, QC, Darlene W. Dentons Canada LLP sets in Africa. “Canada is used quite frequently for (780) 423-7306 [email protected] such cases. For companies that have head offices in Toronto or Vancouver, it gives them the legal Ms. Scott provides legal advice to a broad range of institutional and basis to file in Canada.” corporate clients on commercial matters, including sales, leasing, MacFarlane is seeing more coordination of the development, and acquisition of real estate, business and shares. She has represented lenders and borrowers in financing and secured transactions for Canadian and American regimes, and Wagner, more than 30 years, and chaired the Banking and Finance Group in Edmonton too, notes that international companies, stake- for over 10 years. holders and advisors are seeing more examples of successful restructurings under the CCAA. “They’re becoming more familiar with the flex- Shapiro, Elliot Norton Rose Fulbright Canada LLP ibility, optionality and efficiencies of our CCAA (514) 847-4516 [email protected] regimes and the effect of our Canadian orders,” she says. “This is leading to more discussion and As Co-Chair of Norton Rose Fulbright’s Canadian Corporate Finance and consideration at the initial strategizing stage, as Securities team, Mr. Shapiro’s transaction-oriented and cross-border there’s a recognition of what can be done under practice focuses on corporate and securities law, public and private M&A, Board advisory, governance and disclosure, and private equity and venture our CCAA, and a desire to take advantage of capital transactions. He also works on commercial licensing, technology these benefits.” transfer and collaboration arrangements.

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Cannabis Business Growth Ahead

WITH CANADA LEGALIZING cannabis for recreational use in Cana- da in October, 2018 became a year of big deals in the sector. InNovember, Constellation Brands — aninternationalproducer and marketer of beer, wine and spirits — increased its stake in Can- opy Growth by an additional $4 billion (it had acquired a smaller stake earlier in the year). Two months earlier, Canopy had bought up Hiku Brands, parent company of AS THE CANADIAN CANNABIS Tokyo Smoke, for $250 million. SECTOR CONTINUES TO GROW, Aurora Cannabis, one of the world’s largest and fastest-growing M&A LAWYERS HAVE SEEN A RISE cannabis companies, made two ac- IN MAJOR DEALS, BOTH NATIONALLY quisitions: CanniMed Therapeutics AND INTERNATIONALLY for $1.23 billion and MedReleaf BY ELIZABETH RAYMER Corp. for US$2.5 billion. And, in December, the Altria Group, a

tobacco company, bought a 45-per-cent stake in Canada’s Cronos K

Group for US$1.8 billion. OC ST

“It’s certainly a veryexciting” period in M&A in the cannabis sec- ER tor, says Patricia Olasker, a partner at Davies Ward Phillips & Vine- TT SHU

berg LLP in Toronto, who led a team of legal advisors for Canopy :

Growth in the acquisition by Constellation Brands for MedReleaf OTO

shareholders in the purchase by Aurora Cannabis, and who advised PH

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Sheehy, Neil M. Goodmans LLP (416) 597-4229 [email protected]

Mr. Sheehy focuses on domestic and international M&A, corporate finance and private equity transactions including corporate governance and securities regulatory advice for domestic and international clients. He is a member of Goodmans’ Compensation Committee and currently serves as the World Law Group (one of the oldest and largest global legal networks) elected President and Board Chair.

Sherman, Mitchell J. Goodmans LLP (416) 597-4189 [email protected]

Mr. Sherman’s tax practice focuses on corporate/commercial transactions, including equity and debt financings, acquisitions, divestitures, syndications, reorganizations, structured products, investment funds and international tax planning. He was recently the Chair of the Joint Committee and the National Taxation section of the Canadian Bar Association.

Singer, Jeffrey Stikeman Elliott LLP (416) 869-5656 [email protected]

Mr. Singer is Managing Partner, Toronto and a member of the Executive Committee and Partnership Board. His market-leading practice focuses on domestic and international M&A, capital markets and private equity related transactions. He is a widely published author, lecturer at various conferences and law schools and recipient of the Queen Elizabeth II Diamond Jubilee Medal for his service to Canada.

Skingle, QC, Kenneth S. Felesky Flynn LLP (403) 260-3309 [email protected]

Mr. Skingle’s practice is restricted to taxation matters with an emphasis on tax dispute resolution, tax litigation, and personal and corporate tax planning. He is a past member of the Tax Court of Canada Bench & Bar Committee. He has lectured on tax-related topics for the CTF, Tax Executives Institute, CPTS, ICAA, Association of General Counsel of Alberta, University of Calgary and the CBA.

Smit, Carrie B.E. Goodmans LLP (416) 597-4230 [email protected]

Ms. Smit is head of the firm’s Tax Group. Practice focuses on corporate commercial transactions, cross-border mergers, corporate reorganizations, debt restructurings, domestic and international debt financings, international tax planning and private equity investments. She was named the Toronto “Tax Lawyer of the Year” by Best Lawyers in Canada in 2016 and 2018.

Soliman, Walied Norton Rose Fulbright Canada LLP (416) 216-4820 [email protected]

Mr. Soliman is widely regarded as one of the leading special situations practitioners in Canada. Over the past several years, he has been involved in almost every major proxy battle in Canada, acting for both issuers and activists. In addition, his practice focuses on M&A, restructurings, financings, corporate governance and structured products.

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Sollis, Gary R. Dentons Canada LLP (604) 443-7130 [email protected]

Mr. Sollis represents clients in the areas of corporate and securities law, with a focus on acquisitions, financings and reorganizations. He has acted for a variety of public and private companies in financing transactions, including public offerings, private placements of debt and equity, special warrant financings and public and private limited partnership offerings.

Spector, Charles R. Dentons Canada LLP (514) 878-8847 [email protected]

Mr. Spector leads Dentons’ national Corporate Law group. His practice covers a wide range of commercial transactions focusing primarily on public and private corporate and project financing, take-overs, and mergers & acquisitions. He represents clients in certain key industries including energy, oil & gas, pulp and paper, and mining.

Steiner, Daniel E. Norton Rose Fulbright Canada LLP (604) 641-4892 [email protected] “FOR CANADIAN COMPANIES, THE HOLY GRAIL Mr. Steiner advises public and private companies, private equity funds and pension plans regarding M&A, joint ventures, the purchase and sale IS REALLY BEING ABLE of businesses, the formation and financing of business ventures and TO GET A FOOTPRINT INTO general corporate law matters. He has advised parties involved with three THE US. SOME ARE ALREADY transactions that have won ACG British Columbia’s “Dealmakers of the Year” THERE, SUCH AS TILRAY award (2016, 2014, and 2010). AND CANOPY.” - PATRICIA OLASKER, DAVIES WARD PHILLIPS & VINEBERG LLP Stevens, Éric Norton Rose Fulbright Canada LLP (514) 847-4437 [email protected] the Cronos Group in the Altria deal. Mr. Stevens practises mainly in the area of mergers & acquisitions, corporate “I think the challenges have been, because the law and private financings. He regularly acts in major acquisitions, including strategic acquisitions for public and private companies. He was a recipient big deals have had a US nexus, … a process in get- of the “Lexpert Rising Stars: Leading Lawyers Under 40” award and has since ting people on the other side of the border com- received several other awards. fortable with our regulatory regime, and with the industry generally.” That has left a significant role for legal advisors in that respect, she says. And for the investment banking community in particular, Stevenson, Daniel L. Cox & Palmer (506) 462-4754 [email protected] as the mining sector “went into the toilet, the cannabis industry was born.” Mr. Stevenson has a thriving bilingual practice and was recently named a The most interesting aspect of the past year has Lexpert Rising Star: Leading Lawyer Under 40. He regularly advises business been the international aspect of cannabis M&A owners, several banks and individuals in matters relating to mergers & as more and more companies look to expand their acquisitions transactions, commercial financings, tax-driven reorganizations, venture capital financings, commercial real estate, and succession footprint outside of Canada, says Ranjeev Dhil- and estate planning. lon, a partner and co-lead of McCarthy Tétrault LLP’s national Cannabis Law Group, based in Toronto. He sees a continuing trend in international deals with Canadian companies. “If you Story, Craig A. Stikeman Elliott LLP (403) 266-9098 [email protected] want to be a dominant player long-term, you need to look outside our borders.” Mr. Story is a partner in the Capital Markets and Mergers & Acquisitions Donald Belovich, a partner in the Capital Groups. His practice focuses on corporate and securities law, including Markets, Securities and Mergers & Acquisitions public and private capital markets offerings, private equity and venture Groups at Stikeman Elliott LLP in Toronto, who capital funds, M&A and corporate governance. His corporate finance practice includes advising issuers, major investors and underwriters in both the public led the team representing CanniMed Therapeu- and exempt markets. tics’ special committee of the board of directors

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in CanniMed’s purchase by Aurora, notes that Canada’s cannabis sector is equivalent in size to California’s cannabis marketplace. Canadian Strawson, Anthony V. Felesky Flynn LLP licensed producers are buying capacity and an- (403) 260-5634 [email protected] cillary services, but are also looking elsewhere to grow their business markets. In addition to being a tax lawyer, Mr. Strawson is a professional accountant holding designations in Canada and the US. He has written and spoken on “We’re seeing them overseas, … making ac- numerous taxation law matters including for the Canadian Tax Foundation, the quisitions domestically and internationally,” Canadian Petroleum Tax Society, the Society of Trust and Estate Practitioners, Belovich says. “They’re realizing that to stay rel- the Canadian Bar Association and numerous accounting groups. evant and profitable, you need to do more than grow for Canada.” Will 2019 bring the same blockbuster deals to the cannabis industry as 2018 did? Taylor, Ashley John Stikeman Elliott LLP Olasker sees cannabis M&A as moving in (416) 869-5236 [email protected] waves. The first wave began in 2015, she says, and she believes “the consolidation wave … has Mr. Taylor is a partner in the Litigation & Dispute Resolution Group. He is a former Co-Head of the Restructuring & Insolvency Group, and currently serves come and gone.” The second wave, including the on the Associates’ Committee in the Toronto office. He practises exclusively Aurora-MedReleaf deal that she advised on last in the area of insolvency law and represents debtors, court-appointed year, involved deals in which shareholders took officers, secured lenders and purchasers. a key role in deciding whether companies they’d invested in were wholly or partly for sale. The third wave, which Olasker sees as taking Thornton, Robert I. Thornton Grout Finnigan LLP place now, involves activity that “is not Canadian (416) 304-0560 [email protected] buys Canadian, but non-industry player buys industry player.” This includes the Constellation- Mr. Thornton, a Fellow of the IIC and ACB, is named “Lawyer of the Year” in Canopy and Altria-Cronos Group deals, as well The Best Lawyers in Canada 2018. Euromoney’s The Best of the Best 2018 recognized him as one of the top five insolvency and restructuring lawyers as Molson Coors Brewing Co.’s acquisition of The in Canada, while Chambers Global ranks him as a Band 1 Leading Individual Hydropothecary Corporation last year. in Restructuring. He is described as “a leading light” and “one of the most “A ll these players are coming onto the Canadi- innovative in the field.” an stage and buying whole companies, or entering into a control-like relationship with the Canadian entities,” Olasker says. “That’s been interesting, and has delivered a lot of value into the hands of Torrey, John W. Fasken Martineau DuMoulin LLP Canadian players.” (416) 865-4394 [email protected] Dhillon predicts “a flurry of activity” in 2019, with, potentially, some blockbuster deals based Mr. Torrey has extensive expertise in the area of secured lending transactions. With experience in all areas of lending, he has particular expertise in project on companies with good synergies joining forc- and acquisition financings and in all aspects of mine finance. He acts on es. On the other side, he says, as the cannabis behalf of both borrowers and lenders and has extensive experience with market starts to find its feet, “I think we’ll see a broad range of financings in a broad range of industries. some entities that don’t perform well being targets, and can be scooped up cheap,” made even easier since the cannabis sector has largely been funded with shares. Turcotte, Maxime Stikeman Elliott LLP “I think in 2019 we will continue to see large (514) 397-2421 [email protected] amounts of activity, and it will outstrip 2018, quite frankly.” Mr. Turcotte is a partner in the Corporate Group. His practice is primarily Aurora Cannabis’s ultimately successful take- focused on providing corporate advice in the context of mergers & acquisitions (private and public), corporate finance & projects. He has over of CanniMed Therapeutics, completed on also acquired extensive experience in the area of renewable energy, May 2, was “a rollercoaster,” says Stikeman El- infrastructure and utilities. liott’s Belovich, who led the legal team for Can- niMed. What started as a meat-and-potatoes M&A deal in terms of the acquisition became a hostile take-over bid by Aurora midway through, Turner, John S.M. Fasken Martineau DuMoulin LLP he says, and the deal also contained many “firsts.” (416) 865-4380 [email protected] Not only was this deal the first high-profile M&A deal in the cannabis space, but also the first Mr. Turner is the Leader of Fasken’s Global Mining group and the Securities, under Canada’s new take-over rules that took effect Mergers & Acquisitions group. His practice is focused in the resource sector, where he has been involved in many leading corporate finance and mergers in 2016, which give companies more time to re- & acquisitions deals. He represents issuers and underwriters in transactions spond to unsolicited offers and find a higher bidder. involving resource companies active throughout the globe.

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“THE CANNABIS INDUSTRY Urbani, Michael G. Stikeman Elliott LLP ITSELF IS [STILL] COMING (604) 631-1340 [email protected] INTO ITS EARNINGS, THEN CONSTELLATION COMES Mr. Urbani is a partner in the firm’s Corporate and Securities Groups. IN AND RESETS THE BAR He has a diversified corporate practice focused on corporate finance and governance, securities and M&As. He acts for private and public entities and REGARDING VALUE.” investment dealers in public financings and private placements in Canada and the US, as well as on take-over bids, and M&As involving public and - DONALD BELOVICH, private corporations. STIKEMAN ELLIOTT LLP

Vanderpol, Sean Stikeman Elliott LLP Then Constellation Brands made its invest- (416) 869-5523 [email protected] ment in Canopy Growth, which raised the bar and saw lofty valuations, says Belovich. “The Mr. Vanderpol is Co-Head of the Capital Markets and Public Mergers cannabis industry itself is [still] coming into & Acquisitions Groups in the Toronto office. His practice is focused on its earnings,” he explains, “then Constellation public companies and mergers & acquisitions, with emphasis on public M&A transactions (take-over bids, mergers and plans of arrangement), as well comes in and resets the bar regarding value.” as public corporate finance transactions and public governance Regulatory proceedings, then a take-over bid and compliance issues. by Aurora under the new regime, “and crazy volatility in the marketplace, and overnight, the value is swinging in the millions of dollars.” Vaux, Robert Goodmans LLP At the end of the day, Aurora increased its bid (416) 597-6265 [email protected] significantly and put in some more cash in addition to shares. “The valuation and price was Mr. Vaux practises corporate/securities law, focusing on public/private M&A, so compelling, that ultimately it was in the best corporate finance and governance matters, including proxy contests. He is interest of the shareholders,” says Belovich, and Co-Chair of Goodmans’ Corporate Securities Group and an Adjunct Professor at the University of Toronto, Faculty of Law. He has a reputation for assisting CanniMed’s board could approve the deal. in the structuring of novel and sophisticated transactions and dealing with The Constellation deal had a significant impact complicated issues. on the Aurora-CanniMed transaction and others, he adds. Emmanuel Pressman of Osler, Hoskin & Har- Voore, Mihkel E. Stikeman Elliott LLP court LLP’s Toronto office, who acted for Con- (416) 869-5646 [email protected] stellation Brands in its investment in Canopy Growth, explains the rationale behind the deal. Mr. Voore is a partner in the Capital Markets, Securities and Mergers Three years ago Constellation had sold its Cana- & Acquisitions Groups. His practice focuses on corporate and securities dian wine business to the Ontario Teachers’ Pen- law, specializing in mergers & acquisitions, corporate finance, corporate governance and contested shareholder meetings. He is a former Co-Chair sion Plan, a deal “designed to unlock value and of the Securities Group and the former Chair of the Corporate Finance Group capitalize on investment, and reallocate resources” in the Toronto office. to its Mexican breweries, premium label spirits and other products. About a year later, “in what’s otherwise a slow-growth business,” Constellation started looking around and saw Canada’s growth Wagner, Melaney Goodmans LLP in the cannabis sector. The first deal, a 9.9-per-cent (416) 597-4258 [email protected] investment for about $250 million, with the ability to get up to 20 per cent, was conducted, and a Ms. Wagner’s practice focuses on commercial insolvency, restructuring, year after that decided to make a much more ma- bankruptcy and financial services. She has participated in significant terialand meaningfulinvestment in the company: Canadian and cross-border commercial matters and restructurings, with experience in recapitalizations, arrangements under the CBCA, commercial the controlling $4-billion investment. financing transactions, receiverships and CCAA restructurings. Although Constellation was interested in Canopy Growth with a view to creating infused beverages and other edible products, “that’s not the only driver behind the investment,” says Press- Waitzer, Edward J. Stikeman Elliott LLP man. “They were interested in exploring a new cat- (416) 869-5587 [email protected] egory that was a potential competitor to alcohol. The cannabis players are positioning themselves as Mr. Waitzer is Head of the Corporate Governance Group and a former Chair of a … threat to alcohol.” the firm. His practice focuses on complex business transactions, public policy Shifting trends in consumer habits, such as and governance matters. He is a Professor and holds a Chair at Osgoode Hall Law School and the Schulich School of Business, a fellow of the American the move from drinking coffee to energy drinks College of Governance Counsel and a Senior Fellow at the C.D. Howe Institute. among young people, forecasts a potential con-

36 LEXPERT | 2019 | WWW.LEXPERT.CA LEXPERT-RANKED LAWYERS

sumer shift to cannabis edibles, vaping and more. “I think Constellation is an innovator in the alcoholic beverage sector,” says Pressman, “and they Weinberger, David Stikeman Elliott LLP saw a once-in-a-century opportunity. They were (416) 869-5515 [email protected] very forward-looking in terms of understanding shifts in consumer behaviour.” Mr. Weinberger is a partner in the Mergers & Acquisitions, Capital Markets and Securities Groups. His practice focuses on mergers & acquisitions, The Constellation-Canopy deal created much capital markets transactions, as well as private equity transactions. speculation that investment in the cannabis space He has significant experience advising both bidders and targets in hostile by certain types of industries would be more likely and negotiated merger & acquisition transactions. to occur, Pressman says. “A lcohol and beverages, tobacco and pharma were the three big industrials that people had expected to be veryfocused and in- Whitcombe, Michael P. McMillan LLP terested in the sector.” First came the deal by Con- (416) 865-7126 [email protected] stellation, an alcoholic beverages company, then the Altria tobacco (Marlborough brands) company Mr. Whitcombe is the Chairman of McMillan LLP and National Co-Chair of the and its investments in Cronos, and then pharma, Private Equity Practice. He practises business law with a focus on negotiated merger & acquisition transactions (domestic and cross-border), private equity through joint-venture transactions with Tilray, a investments, complex commercial arrangements and corporate governance. Canadian pharmaceutical and cannabis company He is Chairman of the Oakville Community Foundation and a Director incorporated in the United States with primary of MLSE LaunchPad. operations headquartered in British Columbia. “Now, you’ve got a closing of the circle, the trifecta of industries that have identified their horses and Wortzman, Robert D. Wildeboer Dellelce LLP strategic investments.” (416) 361-2930 [email protected] And Canada is the only market that’s available to US producers who want to raise capital, Press- Mr. Wortzman’s practice focuses primarily on M&A and corporate finance man says. Although there are hundreds of profit- transactions. He has significant experience in domestic and cross-border M&A transactions, public and private equity and debt offerings and able, revenue-generating US cannabis producers, restructuring transactions across all industries. He regularly assists issuers, cannabis remains a controlled substance and illegal investment dealers, and institutional and private investors on equity under the US federal Controlled Substances Act, and debt financing transactions. making it difficult for American cannabis producers to borrow money from traditional financial institutions, or to raise capital on federally regulated Zacher, Glenn M. Stikeman Elliott LLP stock exchanges. (416) 869-5688 [email protected] Because of Canada’s expertise in that market, its stock exchanges and capital markets can foster Mr. Zacher is a partner in the Litigation & Dispute Resolution Group and is international cannabis players similar to the way Co-Head of the Energy Group. His practice focuses on complex commercial litigation and class actions, particularly in the energy sector. He has they fostered international junior and mid-market appeared before all levels of provincial courts and the Supreme Court exploration-stage and development-stage mining of Canada, and has conducted arbitrations and acted as counsel before companies, he says. Cannabis producers today are various administrative tribunals. contributing to robust Canadian capital markets, “and as that happens, that is also potentially going to feed and foster the Canadian M&A market.” global revenue-sharing agreement with Authentic In December the proposed amendments to the Brands, which owns the shoe-store chain Nine federal Cannabis Act and the Cannabis Regula- West, among other brands, to develop and mar- tions were released. These proposed amendments ket consumer cannabis brands. “A driver is that if to the Act and Regulations are anticipated to per- you’re going to buy a foot cream, you might prefer mit the legal sale of edibles, extracts and topicals that it say Nine West on it rather than XYZ Weed containing cannabis by October 17, 2019. Co.,” she jokes; and as cannabis products move into Cannabidiol (CBD), a therapeutic cannabinoid the health-and-wellness sector, “this is normal re- which can be used topically, in an oil, has now been tail play, and obviously it makes a ton of sense.” liberalized in the United States, which is ahead of Today, cannabis is “a lot more than the Grateful Canada in that respect, Davies’ Olasker notes. Dead and potheads,” says Belovich. Medical can- “I think we’re going to see … Canadians looking nabis may be available through health-care benefits to buy US hemp assets” so they can produce CBD, and a product such as CBD oil may be safer for use she says. “For Canadian companies, the holy grail by the elderly, for example,thanconventionaldrugs. is really being able to get a footprint into the US. THC and CBD are just two of 113 cannabinoids Some are already there,such asTilray and Canopy.” identified to date, which science can use to create Olasker also sees conventional retailers moving “millions of combinations,” he says. “If you think of into the cannabis space, and notes Tilray’s recent the whole science aspect, that’s hugely exciting.”

WWW.LEXPERT.CA | 2019 | LEXPERT 37 Other Lexpert-Ranked Lawyers

Accursi, Chad; Cassels Brock & Blackwell LLP Dominique, Brian P.; Cassels Brock Kraeker, Bryce A.; Gowling WLG Richards, Gabrielle M.R.; McCarthy Tétrault LLP Ahmed, Firoz; Osler, Hoskin & Harcourt LLP & Blackwell LLP Kraus, Brent W.; Bennett Jones LLP Rodger, J. Mark; Borden Ladner Gervais LLP Aiken, Carrie; Blake, Cassels & Graydon LLP Dorion, QC, AdE, Marc; McCarthy Tétrault LLP Kroft, QC, Edwin G.; Bennett Jones LLP Rogers, Linc; Blake, Cassels & Graydon LLP Ainley, William M.; Davies Ward Phillips Dorion, Robert; Gowling WLG Kruhlak, QC, Ronald M.; McLennan Ross LLP Rogers, R. Ben; Blake, Cassels & Graydon LLP & Vineberg LLP Doyle, Arthur T.; Cox & Palmer Kruse, David; Blake, Cassels & Graydon LLP Ross, Alan L.; Borden Ladner Gervais LLP Akkawi, Michael F. E.; Torys LLP Eddy, QC, R. Bruce; Eddy & Downs Kufeldt, Kent D.; Borden Ladner Gervais LLP Roth, Elie; Davies Ward Phillips & Vineberg LLP Ali Khan, Abbas; Bennett Jones LLP Emanoilidis, John E.; Torys LLP Lamek, Edmond F.B.; DLA Piper (Canada) LLP Rowe, Edward C.; Osler, Hoskin & Harcourt LLP Amm, Michael D.; Torys LLP Fader, Nicholas P.; Bennett Jones LLP Langlois, Pierre; McCarthy Tétrault LLP Roy, Jeffrey P.; Cassels Brock & Blackwell LLP Andison, Tim; Blake, Cassels & Graydon LLP Feiner, Shlomi; Blake, Cassels & Graydon LLP Laval, Cyndi D.; Gowling WLG Ruby, Stephen S.; Davies Ward Phillips Atkinson, Aaron; Davies Ward Phillips Ferland, Denis; Davies Ward Phillips Leard, Neal L.D.; Stewart McKelvey & Vineberg LLP & Vineberg LLP & Vineberg LLP Leclerc, Philippe; McCarthy Tétrault LLP Ruf, Franziska; Davies Ward Phillips Aziz, Andrew W.; Osler, Hoskin & Harcourt LLP Findlay, Norman F.; Bennett Jones LLP Lee, Desmond; Osler, Hoskin & Harcourt LLP & Vineberg LLP Baines, Simon C.; Osler, Hoskin & Harcourt LLP Flaman, Derek S.; Torys LLP Lever, David A.N.; McCarthy Tétrault LLP Rusaw, Cameron M.; Davies Ward Phillips Balfour, Richard J.; Torys LLP Forestell, QC, Peter R.; Cox & Palmer Levy, Eric M.; Osler, Hoskin & Harcourt LLP & Vineberg LLP Barichello, QC, Enzo J.; Bennett Jones LLP Fortier, Philippe; McCarthy Tétrault LLP Lloyd, Jeffrey R.; Blake, Cassels & Graydon LLP Ryan, Maureen E.; Stewart McKelvey Barry, Patrick G.; Davies Ward Phillips Fraiberg, Jeremy D.; Osler, Hoskin & Harcourt LLP MacDougall, David S.; McInnes Cooper Sabine, John W.; Bennett Jones LLP & Vineberg LLP Freitag, Shane; Borden Ladner Gervais LLP MacFarlane, Alex L.; Borden Ladner Gervais LLP Sandler, Tracy C.; Osler, Hoskin & Harcourt LLP Basra, Harinder; Bennett Jones LLP Fung, William; Blake, Cassels & Graydon LLP Maclagan, QC, William S. (Bill); Blake, Cassels Schneider, Chad; Blake, Cassels & Graydon LLP Basra, Sarbjit S.; Davies Ward Phillips Furlan, Stephen; McCarthy Tétrault LLP & Graydon LLP Schwill, Robin B.; Davies Ward Phillips & Vineberg LLP Gage, James D.; McCarthy Tétrault LLP MacParland, Natasha; Davies Ward Phillips & Vineberg LLP Bélanger, Philippe H.; McCarthy Tétrault LLP Gans, Michael; Blake, Cassels & Graydon LLP & Vineberg LLP Sebastiano, Rocco M.; Osler, Hoskin Belsher, Cameron G.; McCarthy Tétrault LLP Garcia, Joseph A.; Blake, Cassels & Graydon LLP Maguire, Patrick T.; Bennett Jones LLP & Harcourt LLP Belsher, Geoffrey S.; Blake, Cassels Gaucher, QC, Alain J.; MLT Aikins LLP Mahood, Robin; McCarthy Tétrault LLP Segal, Lorne W.; Gowling WLG & Graydon LLP Gauthier, Christian P.; Bennett Jones LLP Marley, Patrick W.; Osler, Hoskin & Harcourt LLP Seville, David A.; Torys LLP Bennett, Mark T.; Cassels Brock & Blackwell LLP Gélinas, Michel; Davies Ward Phillips Marshall, Douglas R.; Osler, Hoskin Seviour, Colm St. Roch; Stewart McKelvey Bentley, Ross; Blake, Cassels & Graydon LLP & Vineberg LLP & Harcourt LLP Sharlow, Karen R.; Osler, Hoskin & Harcourt LLP Bertoldi, Linda L.; Borden Ladner Gervais LLP Gibson, QC, Brock W.; Blake, Cassels Maslechko, William S.; Burnet, Duckworth Shea, Patrick M.; McCarthy Tétrault LLP Bieganek, QC, Darren; Duncan Craig LLP & Graydon LLP & Palmer LLP Shishler, Melanie A.; Davies Ward Phillips Biringer, Monica E.; Osler, Hoskin & Harcourt LLP Gilmour, Bradley S.; Bennett Jones LLP Mayr, Clemens; McCarthy Tétrault LLP & Vineberg LLP Bish, David; Torys LLP Girvan, Garth (Gary) M.; McCarthy Tétrault LLP McAusland, AdE, David L.; McCarthy Tétrault LLP Shouldice, Robert R.; Borden Ladner Gervais LLP Black, Robert N.; DLA Piper (Canada) LLP Glass, Jeff; Blake, Cassels & Graydon LLP McCarthy, Allison J.; Stewart McKelvey Simard, Chris D.; Bennett Jones LLP Block, QC, Randall W.; Borden Ladner Gervais LLP Goldlist, A. Gerold; Davies Ward Phillips & McCullough, Jonathan; Bennett Jones LLP Sirett, Robin M.; McCarthy Tétrault LLP Bloom, Brian; Davies Ward Phillips & Vineberg LLP Vineberg LLP McElman, Josh J.B.; Cox & Palmer Small, Shea T.; McCarthy Tétrault LLP Bogden, John-Paul; Blake, Cassels & Graydon LLP Goldman, Alyson F.; Burnet, Duckworth McKoen, QC, Steven R.; Blake, Cassels Smellie, James H.; Gowling WLG Boidman, Nathan; Davies Ward Phillips & Palmer LLP & Graydon LLP Smith, C. Paul W.; Stewart McKelvey & Vineberg LLP Goldman, Jay; Cassels Brock & Blackwell LLP McReynolds, D. Shawn; Davies Ward Phillips Smith, QC, Lawrence E. (Laurie); Boivin, Pierre; McCarthy Tétrault LLP Goldsilver, Erik; Borden Ladner Gervais LLP & Vineberg LLP Bennett Jones LLP Bomhof, Scott A.; Torys LLP Gosselin, Éric; McCarthy Tétrault LLP Meghji, Al; Osler, Hoskin & Harcourt LLP Spencer, David A.; Bennett Jones LLP Booth, QC, Robert (Bob) T.; Bennett Jones LLP Gow, Graham P.C.; Graham Gow Professional Meighen, Christian; McCarthy Tétrault LLP Spurn, Craig N.; Osler, Hoskin & Harcourt LLP Boucher, Patrick; McCarthy Tétrault LLP Corporation Melanson, Michael N.; Bennett Jones LLP Stein, Paul M.; Cassels Brock & Blackwell LLP Bourassa, Kelly J.; Blake, Cassels & Graydon LLP Grant, QC, Robert G.; Stewart McKelvey Mercier, Vincent A.; Davies Ward Phillips Stringer, QC, John D.; McInnes Cooper Bourassa, Philippe; Blake, Cassels & Graydon LLP Greenfield, QC, Donald E.; Bennett Jones LLP & Vineberg LLP Suarez, Steve; Borden Ladner Gervais LLP Bowman, Stephen W.; Bennett Jones LLP Grenon, Gerald A.; Osler, Hoskin & Harcourt LLP Mercury, John M.; Bennett Jones LLP Swartz, Jay A.; Davies Ward Phillips Bradley, Noralee M.; Blake, Cassels Grieve, Sander; Bennett Jones LLP Michael, Ian C.; Bennett Jones LLP & Vineberg LLP & Graydon LLP Guarascio, Frank D.; Blake, Cassels Milani, QC, Michael W.; McDougall Gauley LLP Taplin, Roger R.; McCarthy Tétrault LLP Branchaud, René; Lavery, de Billy, L.L.P. & Graydon LLP Milelli, Sven O.; McCarthy Tétrault LLP Tardif, Alain N.; McCarthy Tétrault LLP Brender, Mark D.; Osler, Hoskin & Harcourt LLP Guindi, Shahir; Osler, Hoskin & Harcourt LLP Mingay, Paul A.D.; Borden Ladner Gervais LLP Tardif, Philippe; Borden Ladner Gervais LLP Bright, Denise D.; Bennett Jones LLP Hansell, Carol; Hansell LLP Moch, Darcy D.; Bennett Jones LLP Tay, Derrick C.; Gowling WLG Brussa, John A.; Burnet, Duckworth & Palmer LLP Hansen, Robert O.; McCarthy Tétrault LLP Moncik, Eric; Blake, Cassels & Graydon LLP Themens, Pierre-André; Davies Ward Phillips Bryce, Douglas A.; Osler, Hoskin & Harcourt LLP Hardwicke-Brown, Mungo; Blake, Cassels Mondrow, Ian A.; Gowling WLG & Vineberg LLP Buckingham, Janice; Osler, Hoskin & Harcourt LLP & Graydon LLP Moore, J. Alexander; Blake, Cassels Thivierge, Manon; Osler, Hoskin & Harcourt LLP Burgoyne, Terrence R.; Osler, Hoskin Harricks, Paul H.; Gowling WLG & Graydon LLP Tobin, John J.; Torys LLP & Harcourt LLP Harvey, Frédéric; KPMG Law LLP Morris, Kevin M.; Torys LLP Traub, Jennifer; Cassels Brock & Blackwell LLP Burns, Stephen D.; Bennett Jones LLP Hatfield, QC, Bruce D.; Cox & Palmer Munro, Shawn M.; Bennett Jones LLP Travers, QC, James C.; Stewart McKelvey Bursey, David W.; Bennett Jones LLP Haynes, Bryan C.G.; Bennett Jones LLP Murphy, Suzanne V.; McCarthy Tétrault LLP Trossman, Jeffrey C.; Blake, Cassels Cannon, Douglas A.; McCarthy Tétrault LLP Helbronner, Valerie; Torys LLP Nikolakakis, Angelo; EY Law LLP & Graydon LLP Cardarelli, Corrado; Torys LLP Hennessey, Karen E.; Gowling WLG O’Callaghan, Peter J.; Blake, Cassels Vail, QC, Walter D.; Cox & Palmer Chaikof, David A.; Torys LLP Hewat, Christopher A.; Blake, Cassels & Graydon LLP Vaillancourt, Marie-Emmanuelle; Davies Ward Chaiton, Harvey G.; Chaitons LLP & Graydon LLP O’Neill, Seán C.; McCarthy Tétrault LLP Phillips & Vineberg LLP Chambers, Gordon R.; Cassels Brock Hickman, Stephanie; Cox & Palmer Olasker, Patricia L.; Davies Ward Phillips Vandenberg, Edward; Osler, Hoskin & Harcourt LLP & Blackwell LLP Higgins, Charles L.K.; Pilot Law LLP & Vineberg LLP Vaughan, Steve; W.S. 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Alan; Bennett Jones LLP & Palmer LLP DesLauriers, J. Mark; Osler, Hoskin Kopstein, Robert; Blake, Cassels & Graydon LLP Reagh, Charles S.; Stewart McKelvey Zych, Kevin J.; Bennett Jones LLP & Harcourt LLP Kortbeek, Mark P.; Bennett Jones LLP Reiter, Barry J.; Bennett Jones LLP Dietrich, Jane; Cassels Brock & Blackwell LLP Kraag, Scott; Torys LLP Reynolds, QC, Ian W.; Bennett Jones LLP

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fasken.com MINING & METALS GOLD & DIAMONDS

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000

1 Nutrien Ltd.(Dec18)1 25,688,365 1 Barrick Gold Corp.(Dec18)1 9,470,478 2 Rio Tinto Alcan Inc.(Dec18)1 15,800,548 2 Kinross Gold Corp.(Dec18)1 4,187,385 3 Teck Resources Ltd.(Dec18) 13,459,000 3 Goldcorp Inc.(Dec18)1 4,093,030 4 Vale Canada(Dec17) 6,051,948 4 Yamana Gold Inc.(Dec18)1 2,428,989 5 First Quantum Minerals Ltd.(Dec18)1 5,186,924 5 Turquoise Hill Resources(Dec18)1 1,739,096 6 Lundin Mining Corp.(Dec18)1 2,334,755 6 B2Gold Corp.(Dec18)1 1,594,549 7 Cameco Corp.(Dec18) 2,170,829 7 Iamgold Corp.(Dec18)1 1,474,424 8 HudBay Minerals Inc.(Dec18)1 2,065,687 8 Centerra Gold Inc.(Dec18)1 1,466,887 9 Novelis Inc.(Dec18)1 1,478,831 9 Kirkland Lake Gold(Dec18)1 1,201,151 10 Pan American Silver Corp.(Dec18)1 1,050,337

CHEMICALS RETAILERS

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000

1 Dow Chemical Canada(Dec18) 5,290,000 1 Alimentation Couche-Tard(Oct18)1 78,846,637 2 Methanex Corp. (Dec18)1 5,101,529 2 Wal-Mart Canada(Jan18)1 35,001,222 3 Nova Chemicals(Dec17)1 4,989,221 3 Costco Wholesale Canada(Sep18)1 26,142,786 4 PPG Canada(Dec18)1 1,980,415 4 Parkland Fuel Corp.(Dec18) 14,403,000 5 BASF Canada(Dec18) 1,707,890 5 Hudson’s Bay Co.(Feb18) 14,278,000 6 Chemtrade Logistics IF(Dec18) 1,596,134 6 Canadian Tire Corp.(Dec18) 14,044,600 7 DuPont Canada(Dec18)1 994,096 7 Home Depot of Canada(Feb19)1 9,813,998 9 PolyOne Canada(Dec18)1 330,501 8 Home Hardware Stores(Dec17) 6,000,000 9 Best Buy Canada(Feb18)1 4,102,361 10 Dollarama Inc.(Jan19) 3,548,503

AUTOMOTIVE TRANSPORTATION

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000

1 Magna International Inc.(Dec18)1 53,372,698 1 Air Canada(Dec18) 17,984,000 2 Honda Canada(Mar18) 17,480,000 2 Canadian National Railway Co.(Dec18) 14,999,000 3 FCA Canada Inc.(Dec18)1 15,762,961 3 Canadian Pacific Railway Ltd.(Dec18) 7,702,000 4 Ford Motor Co. of Canada(Dec18)1 13,662,011 4 TFI International Inc.(Dec18) 5,169,668 5 General Motors of Canada(Dec18) 11,007,000 5 WestJet Airlines Ltd.(Dec18) 4,771,144 6 Linamar Corp.(Dec18) 7,670,849 6 Transat A.T. Inc.(Dec18) 3,040,531 7 BRP Inc.(Jan19) 5,246,800 7 Chorus Aviation Inc.(Dec18) 1,486,000 8 Martinrea International Inc.(Dec18) 3,665,478 8 Greater Toronto Airports Authority(Dec18) 1,479,749 9 Lear Canada(Dec18)1 629,448 9 NAV Canada(Aug18) 1,454,454 10 Dana Canada(Dec18) 288,000 10 Mullen Group(Dec18) 1,263,388

TECHNOLOGY MEDIA & BROADCASTING

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000 1 CGI Inc.(Sep18) 11,509,735 1 Quebecor Media(Dec18) 4,181,000 2 Rogers Wireless(Dec18) 9,200,000 2 Bell Media(Dec18) 3,121,000 3 Celestica Inc.(Dec18) 8,614,480 3 Cogeco Inc.(Aug18) 2,543,645 4 Bell Mobility(Dec18) 8,422,000 4 Rogers Media(Dec18) 2,168,000 5 Apple Canada(Sep18) 8,036,798 5 Corus Entertainment Inc.(Nov18) 1,669,000 6 IBM Canada(Dec18) 6,415,000 6 Postmedia Network Canada Corp.(Nov18) 659.817 7 Constellation Software(Dec18)1 3,992,195 7 Canadian Broadcasting Corp.(Dec18) 573,075 8 Open Text Corp.(Jun18)1 3,608,642 8 TVA Group(Dec18) 553,578 9 Siemens Canada(Sep18) 3,500,000 9 Torstar Corp.(Dec18) 520,562 10 BlackBerry Ltd.(Nov18)1 1,341,969 10 The Score Inc.(Aug18) 28,020

CANNABIS FOOD PRODUCTION AND DISTRIBUTION

RANK COMPANY AND YEAR-END REVENUE $000 RANK COMPANY AND YEAR-END REVENUE $000 1 Canopy Growth(Mar18) 141,924 1 George Weston Ltd.(Dec18) 48,605,000 2 Aphria Inc.(May18) 98,176 2 Empire Co.(Nov18) 24,742,300 3 Aurora Cannabis(Jun18) 63,394 3 Metro Inc.(Dec18) 15,333,200 4 CannTrust Holdings(Dec18) 33,478 4 Saputo Inc.(Mar18) 11,545,800 5 Namaste Technologies(Aug18) 19,387 5 McCain Foods(Jun18) 9,505,013 6 Isodiol International (Mar18) 19,137 6 Agropur Cooperative(Nov18) 6,714,167 7 Newstrike Brands(Sep18) 18,838 7 La Coop fédérée (Oct18) 6,581,038 8 OrganiGram Holdings(Aug18) 13,884 8 Maple Leaf Foods(Dec18) 3,498,703 9 Cronos Group Inc.(Dec18) 11,876 9 Cott Corp.(Dec18)1 3,118,894 10 Sunniva Inc.(Dec17) 10,139 10 Premium Brands Holdings(Dec18) 3,023,100 Footnotes Companies are ranked by Canadian-dollar revenue. 1. Revenue converted from U.S. dollars. 3. Figures have been annualized in the latest year. 9. Revenue includes unrealized gains and losses on bonds and other assets, as required by international accounting standards. These gains and losses are often substantial for life insurers, and can vary widely from year to year.

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PHOTOGRAPH KATHLEEN FINLAY SPONSOR CONTENT ‘PART TRAFFIC COP, PART COACH AND PART VISIONARY’ Citibank Canada CEO John Hastings wears a lot of hats in his job overseeing 2,000 employees

JOHN HASTINGS GREW UP THE SON OF A BANKER, whose job let the family experience life in different cities across North America, but it wasn’t until he got a job offer at Citi that he embraced the financial services industry. Mr. Hastings, now chief executive officer of Citibank Canada, joined the Canadian division of New York-based Citigroup Inc. as a junior banker in 1982 — his first job after earning an MBA — attracted by the bank’s progressive business model and global reach. “It was a big, international place to work that was very innovative — and still is,” says Mr. Hastings, who has been with the bank ever since, working in various corporate and investment banking roles before being appointed CEO of the Canadian business in 2010. It was a challenging time for the banking industry, in the wake of the 2008 global financial crisis, and Mr. Hastings acknowledges doing some soul searching back Citibank Canada CEO John Hastings credits “consistency and resilience” for the company’s 100-year history in Canada. then about whether to stay in the banking sector. He credits the courage and determination he man School of Management. 2011 and former CEO of Export excels at it.” developed growing up, continu- “You learn about diversity and Development Canada, describes Apart from expanding and ally adapting to change and new different cultures,” Mr. Hastings Mr. Hastings as both highly expe- diversifying Citi’s Canadian challenges, for giving him the says of his experiences living in rienced and personable — quali- operations, Mr. Siegel says the confidence to stick with it. different parts of North America. ties that have helped him drive bank has developed a reputation “I’ve never been shy about trying “You also learn to appreciate growth and change at the bank. for having strong talent and for its something new and taking on a Canada. I still have a great fond- Citi Canada is one of the most active involvement in communi- challenge, believing I could be ness for the U.S., but also a great global financial services organiza- ties across the country. “These are successful at it, and not being appreciation for Canada.” tions in the country, with access important, and they speak a lot to concerned about the consequenc- Mr. Hastings wears many hats to Citi’s network in 160 countries Citi’s image and reputation and es if I’m not,” says Mr. Hastings. in his role as Citi Country Officer and jurisdictions. brand in the market,” he adds. “I’ve always believed I will land on and CEO of Citibank Canada, “As a result, the leadership style Mr. Hastings is proud of what my feet.” spanning everything from busi- has to be broad and diverse,” Mr. Citi has accomplished in its 100 Born in Hamilton, Mr. Hast- ness development and regula- Siegel says. “You have to be part years in Canada, and since he’s ings’s family moved frequently tory affairs to developing and traffic cop, part coach and part been the bank’s country leader. and he resided in Edmonton, Dal- engaging the 2,000 employees visionary. You have accountability “Citi has gone through a lot of las, New York and San Francisco he oversees across the country. “I over the overall operations, but change and evolution. The consis- before returning to Canada to get make sure we’re building a team not necessarily direct control over tency and resilience of this place his economics degree at Queen’s that’s not just collaborative and the direct transacting. You have I think is phenomenal,” he says. University. After a short stint as capable but also one that real- to be very good at developing re- “I am proud we’ve been able to do an entrepreneur running a carpet izes the importance of how they lationships across the network to that. I have a great team of people cleaning company with a friend, deliver to clients,” he says. be able to influence, protect and making this place successful and he decided to pursue his MBA at Eric Siegel, an independent jointly plan. … John is recognized putting it on the map for the rest the University of Toronto’s Rot- director at Citibank Canada since at Citi as someone who really of the world.” •

This content was produced by Globe Content Studio. The Globe’s editorial department was not involved in its creation. SPONSOR CONTENT PATHWAYS TO PROGRESS FUNDING ‘REALLY DOES CHANGE LIVES’ The Citi Foundation supports programs that help young Canadians build connections, find employment and become entrepreneurs

TODAY’S YOUNG PEOPLE ARE Foundation, which works to impact on all Canadians,” says with its Youth Empowerment MOVING TO URBAN CENTRES promote economic progress and Tim Lang, chief executive officer Program, which helps 260 young AT A FAST CLIP, seeking the improve the lives of people in of YES. He says every dollar of people in the child welfare sector education, experience and op- low-income communities around funding returns $3 to the econ- develop personal finance skills portunities to pursue their career the world. The foundation is the omy in wages, tax revenue, and a and secure employment and aspirations. Unfortunately, too philanthropic arm of global bank reduced need for social services. make the transition from foster many of them are falling through Citigroup Inc. “It really does change lives.” care to sustainable independent the cracks, unable to harness the In 2017, the Citi Founda- The Citi Foundation has also living. resources required to land their tion announced an additional helped build and expand the It also assisted in the develop- first job. US$100-million investment in capacity of Rise Asset Develop- ment of Pathways to Education’s Accelerating Pathways, a 2015 Pathways to Progress to help ment, a non-profit that trains Pathways to 21st Century Success report commissioned by the improve the lives of 500,000 and provides low-interest small program, which provides 5,400 Citi Foundation and led by The young people globally, including business loans and mentorship students with mentoring, skills Economist Intelligence Unit, CAD$700,000 over three years to entrepreneurs with mental training and workshops to help the research consultancy arm for four charitable organizations health or addiction challenges. them find meaningful employ- of The Economist, found youth in Canada: the Children’s Aid Through annual grants from ment and entrepreneurship optimism for their future is high Foundation of Canada, Pathways the Citi Foundation, Rise has opportunities. — but opportunities are lacking. to Education Canada, Youth been able to expand its program- Ms. McHale says Citi isn’t Toronto ranked first in the report Employment Services (YES) and ming, including developing an just providing funding to these — which surveyed 5,000 young Rise Asset Development. online curriculum that reaches and other organizations, but people in 35 cities worldwide on For example, the Citi Founda- eligible entrepreneurs outside also enabling thousands of its 31 indicators such as affordabili- tion is providing funding to help of major urban centres. Citi employees to volunteer as men- ty of education and ease of open- YES expand its mission to train Foundation has also supported tors, coaches and role models to ing a business — but noted a and help young people aged Rise in developing EnterpRISE- young people in support of their youth unemployment rate that’s 16 to 24 find employment in ing Youth, a free online entrepre- career progress and aspirations. about double the city’s average. cities across Canada. The YES neurship course. She says Citi employees are eager A labour market that’s moving program also includes entrepre- Support from the Citi Founda- to take part. toward contract positions and neurship training, job placement tion helps Rise clients “create “Citi is a global company, but away from full-time jobs, as well services and specialized pro- sustainable change for them- we have deep roots in local as mismatch of skills, are largely gramming for those with mental selves and their families,” says communities in the countries to blame. health issues. Rise CEO Lori Smith. where we do business, including The research kicked off the “The Pathways to Progress Citi is also supporting the Chil- Canada for the past 100 years,” Citi Foundation’s Pathways to support will have a long-lasting dren’s Aid Foundation of Canada Ms. McHale says.• Progress initiative, designed to prepare young people for employment and help them Annual grants build the confidence, entrepre- from the Citi neurial mindset and profes- Foundation sional connections needed to have helped Rise Asset succeed in any sector. Pathways Development to Progress provides grants to grow and leading community organiza- expand their tions that provide entrepreneur- programming. The non-profit ship training, mentorship and provides loans leadership development courses and mentorship to help young men and women to young find their path to academic and entrepreneurs with mental career success. health or “We don’t just want to help addiction train people for a job today but challenges. also empower them to be able to navigate through a changing economic system,” says Brandee McHale, president of the Citi

This content was produced by Globe Content Studio. The Globe’s editorial department was not involved in its creation. 17%28% Predicted annual growth in parcel-shipping volume due to e-commerce in 13 leading markets through 2021

COULD CANADA BE FIRST WITH A HYPERLOOP? The dark horse in the startup TransPod thinks it ground-transportation race could be sooner than you is the Hyperloop, which, think. It has developed its thanks to the promotional own hyperloop technology talents of Elon Musk, that’s entirely electric and may be the best-known has begun construction on new long-distance travel a small-scale test version in solution—even if it’s the rural France. The next phase most sci-fi. It’s hard to say is a full-sized test track by how far off an intercity 2021. TransPod claims it network of tubes with can build its network for passenger-filled rockets $29 million per kilometre— hurtling through them at much less than the $55 faster-than-jet-aircraft million to $149 million some speeds may be, but Toronto studies estimate.

Length of SMART SUPERHIGHWAYS China’s high- speed rail Companies like Amazon are already network experimenting with drones and other slick solutions to cover the last mile of TRANSPORTATION 2008 the supply chain. But how do you opti- 113 kilometres mize the rest of the freight process in High-tech ways to span a vast country like Canada? At present, Construction shipping a six-pound package from time: Toronto to Vancouver costs nearly four Canada’s vastness 3 years times as much as transporting it from New York to Los Angeles. Roger Francis, director of energy, Canada’s original megaproject, the Canadian Pacific Railway, took aim at 2018 environment and transportation at perhaps our most pervasive national challenge: the country’s enormous the Conference Board of Canada, has size. After more than a century of rail and highway construction and a a big, hairy idea for how to eliminate boom in air travel, the vast distances between urban centres remain a costly, land-consuming warehouses costly, time-consuming problem, affecting everything from the price of and slow-moving trucks stuck in Alberta’s landlocked oil to the sluggish adoption of online shopping due traffic: a nationwide hub-and-spoke to high shipping rates. Canada’s space conundrum requires more than system of dedicated smart highways for freight. The network’s entire length one solution—what’s good for goods may not be the best option for a would be outfitted with sensors and family travelling to visit the grandparents. Here are two proposals. state-of-the-art telecommunications

00 that could support fully autonomous FAST PASSENGER TRAINS travel or “platooned” chains of trucks with a single driver at the front of a The age of high-speed rail is well projects to actually work in Canada half-dozen 18-wheelers, all following under way in Europe and East Asia, but will be a lot harder than expanding it.” the lead truck’s motions. It would have North America continues to use train The goal, though, may not be high- very limited on- and off-ramp access, speed lines everywhere, so much as exclusively at major urban hubs,

technology that was looking long in ,0 the tooth in the 1960s. A penchant for what Perl calls “electrified mobility”: allowing much faster highway speeds repeatedly studying high-speed rail’s modern electric trains nationwide, and predictable shipment arrivals that potential has gotten Canada no closer with super-fast main lines in densely could then connect seamlessly with to laying track for bullet trains than populated areas working alongside just-in-time delivery services. it was when Via Rail’s glitch-plagued slower, electric long-distance lines The cost? Impossible to gauge right TurboTrain was retired in 1982. elsewhere, which is the approach now. Consider that none of the trans- So what would it take to implement Sweden and Finland have taken. port officials involved in a proposed The trouble is, the price tag is Rotterdam-to-Vienna “smart road” a train network here like those that 29 shuttle passengers across the Spanish enormous—a Toronto-to-Windsor kilometres pilot project, which involves installing plain and the Chinese countryside at line would cost an estimated $20 bil- sensors on existing highways to better Construction more than 300 kilometres per hour? lion—and there’s little native expertise time: communicate warnings to drivers, China has proven you can criss-cross a in North America. Bombardier might 10 years have been willing to put a price tag on nation nearly Canada’s size with high- produce equipment for high-speed rail that much less elaborate initiative. But speed track in less than 20 years. The elsewhere, but no one has ever built in the coming era of autonomous vehi- technology is available. But Anthony a single kilometre of track or a bullet cles, the technology will be necessary. Perl, an urban studies professor at train to run in this country. Construc- “Without the initial backbone that can Simon Fraser University and chronicler tion by experienced foreign firms, pos- supply the autonomous delivery over of high-speed rail, likens the situation sibly with concessions to operate the longer distances, it’s tough to create to the old adage that the first million is lines once they are built, would greatly those stand-alone, bespoke, last-mile the hardest. “Getting the first of these accelerate the process, says Perl. delivery systems,” says Francis. /C.T.

8 MAY 2019 / GLOBE INVESTOR Replacement cost of those Estimated increase in GDP urban infrastructure assets for each dollar spent on infrastructure in Canada since $905 billion 2008: up to $1.20

DISTANCE-BASED ROAD PRICING ZERO PLASTIC WASTE SYSTEMS NATIONAL ELECTRICITY GRID URBAN SENIORS’ VILLAGES Road tolls that rely on sensors A mere 12% of plastic is recycled With the increase in everything A generation from now, more than and data analytics could help ease in Canada today. To move beyond from electric cars to data centres, a quarter of Canadians will be over urban gridlock while providing new grocery bag and straw bans to real the urban future will need more the age of 65, making comprehen- revenue. A system that charges progress, cities need a thorough electricity. But our power grids are sive aging-in-place programs and drivers a nominal fee (one to two recycling system upgrade. The key poorly integrated. Connecting them home care necessary. That includes cents per kilometre) based on how is regulation—specifically extended through interties would be a huge retrofitting of existing housing with far they travel wouldn’t just divert producer responsibility (EPR) laws boon, but the price tag has proven handrails, bathroom fixtures and traffic from one highway to an- that shift the burden from consum- too high: A recently completed other safety features of elderly life, other, the way traditional tolls do, ers to producers. B.C.’s EPR law has 1,400-kilometre line in Manitoba and constructing seniors’ housing but encourage shorter commutes spurred plastic producers to bring (only about two-thirds the length in walkable urban communities. and more use of transit, resulting in in curbside reclamation, ushering needed to link the four western There’s also increasing interest in fewer cars on the road. Vancouver’s in recycling rates above 70% for provinces) cost about $5 billion. specialized developments like the transit authority found that charg- most beverage containers. A true The savings, though, would be sub- “dementia village” that recently ing by zone would cost drivers next-generation system could begin stantial—simply linking B.C.’s and opened in Langley, B.C.—a cluster $3 to $5 per day and generate as with plastic made from captured Alberta’s grids would save ratepay- of cottages for seniors with de- much as $1.6 billion in net revenue CO2 instead of natural gas and fin- ers $200 million a year by allowing generative mental conditions that per year, all while reducing traffic ish with the producer making new utilities to sell cheap energy to provides urban necessities within congestion by as much as 25%. plastic from the reclaimed waste. each other instead of to the U.S. a secure property. /C.T.

MAY 2019 / GLOBE INVESTOR 7 82% Portion of 30% Share of Canada’s urban Canada’s infrastructure graded “fair” to population that “very poor” by the Federation resides in cities of Canadian Municipalities far the largest energy-storage initiative in Canada and among the biggest in the world. It would also CITIES address a problem that’s plagued Ontario’s power market for years: excess generation. The Nanticoke Renovating site, says Hydrostor CEO Curtis VonWalleghem, would “soak up and our surplus generation in Ontario, which means we don’t have to ship modernizing it at a loss to the United States.” The technology could replace the natural gas plants that now the urban help electricity providers balance $2–$3 their grids. As utilities increase Savings to landscape the average their reliance on wind and solar utility for power, paradoxically, they often each dollar Canada is an urban country and need more natural gas to keep sup- invested growing more so—at least 90% of us in energy ply and demand stable, explains storage will live in cities by 2050. But urban Tim Grejtak, an analyst at Lux thinkers increasingly reject the Research, a Boston-based tech 2,122 supersize approach to city building consultancy. “If we want a zero- Gigawatts that brought us ring roads and carbon economy, we need some- of green elevated waterfront expressways. thing that does that same balanc- electricity Instead, cities need a 21st-century Ontario ing—just without fossil fuels.” wasted in upgrade: smarter, more efficient Grejtak is more optimistic about 2018 due systems, from roadway to office the economics of new hydrogen to excess tower to sewer pipe. Taken together, supply and electrochemical batteries but these updates would constitute a sees opportunity for compressed massive urban infrastructure project. air when used at larger scale. Plans at this scale can easily get lost So does NRStor CEO Annette in jurisdictional overlap, making Verschuren, provided govern- co-ordination crucial—and the recent ments commit to carbon pricing, Pan-Canadian Framework on Clean

which would effectively raise the 8 Growth and Climate Change that lines cost of natural gas and reward up federal and provincial actions on technologies that don’t require energy use, emissions reduction and fossil fuels. She estimates that cleantech investment could be a model. stored energy could be delivered The value in the projects that follow to the grid at $200 per kilowatt- goes well beyond savings. Many of hour (half the current price in them would create investment and

Ontario) next year and could drop 36 expertise in emerging infrastructure to $160 or less by 2025. industries. What’s more, when A major project like the one leading-edge businesses like Amazon proposed for Nanticoke would and Google look to set up shop, they help prove the viability of large- hunt not just for tax breaks but for the scale energy storage. And while a 3, next-generation amenities and green national network would be tricky quality-of-life enhancements that due to the differences in provin- attract top talent. cial electricity grids and the country’s vast geography (electricity BUILDING EFFICIENCY RETROFITS SMART SEWERS degrades over long distances), About 70% of urban buildings will Most of us don’t want to know still be in use at mid-century. In what’s going on inside our sewers, embracing storage even region- the face of climate change and but for the people charged with ally would accelerate the shift to 22 volatile energy prices, these homes running them, that information is Number of and offices will need co-ordinated invaluable—and smart technology renewables. But our utility sector homes that upgrades to how they make and is making it easier to get. By install- could power is loath to take risks, even as Aus- use energy. From simple fixes like ing a network of low-cost sensors, tralia, the U.S and Europe power installing efficient windows and city managers can get real-time ahead with energy storage. “We heating systems to generating pow- information about water flows that have to wait for everybody else do er on-site, the retrofit could slash could prevent floods and other sew- emissions by 50% or more and age problems while making more it before we do,” Verschuren says. substantially reduce costs. But the effective use of employee time. The “We’re very slow to make regu- price tag would be high. The Pem- small city of South Bend, Indiana, latory and policy change. We’re bina Institute estimates retrofitting which was the first to implement going to be left behind if we don’t every building in B.C. would run to the technology in 2015, has seen $1 billion annually until 2050—but $1.5 million in annual savings and make it easier for companies to would generate nearly $5 billion in eliminated the need for $500 mil- scale up.” /Max Fawcett economic activity. lion in new sewage projects.

6 MAY 2019 / GLOBE INVESTOR SPONSOR CONTENT CITI FOCUSING ON DIVERSITY AND INCLUSION WITH A VARIETY OF GLOBAL AND LOCAL PROGRAMS Global bank leading peers with transparency and goals to promote hiring, promotion, and retention of women and minorities

AS MANY ORGANIZATIONS said in a recent letter to Citi HAVE DISCOVERED, talk- employees. ing about diversity and taking Citi has a culture of embracing meaningful action are not the diversity and inclusion that is same thing. embedded across all levels, from “Achieving real diversity and junior employees to the C-suite, inclusion requires us to think Ms. Di Scola says. The financial and do things differently,” says institution’s goals include the Christine Di Scola, head of hu- hiring, promotion and reten- man resources at Citi Canada, tion of women and members of the Canadian unit of global other designated groups. Some financial services company of the programs that support Citigroup Inc. Citi’s diversity strategy include Recently, Citi was the first initiatives designed to enable the major institution to disclose the progress of women, including results of its pay equity reviews, the establishment of female-led comparing compensation of networks across the world. women to men, and U.S. mi- “Citi has more than 65 women’s norities to U.S. non-minorities. network chapters and diversity Citi’s diversity strategy includes programs designed to enable the progress of women, including the establishment of female-led networks across the world. Among its results, the pay equity councils around the world, all review found that women glob- helping to make our company ally are paid on average 99 per a more inclusive and equitable connects undergraduate stu- Camilla Sutton, chief executive cent of what men are paid at workplace that reflects the com- dents to senior leaders in various officer of Toronto-based Women Citi when adjusted for factors munities where it operates,” says lines of business, in the hopes in Capital Markets, a not-for- including job function, level and Tracey Warson, head of Citi Pri- they apply for either a summer profit organization that advo- geography. vate Bank North America and or full-time analyst class the cates for women in the financial Further, in 2019 the com- former co-chair of Citi Women, following year, to roles that have services industry, says a lack of pany shared the results of the the firm’s global strategy fo- been traditionally underrepre- diversity is now considered an unadjusted pay gap for women cused on the empowerment of sented by women. operational risk – and potential- and U.S. minorities – the dif- women as business leaders and Citi has also developed an ly a signal that an organization ference in compensation with drivers in the organization. “As Early Identification Program to isn’t progressing. “Many firms no adjustment for other factors. an example, my organization focus on identifying, mentoring today recognize not only do they This review identified that the in North America reflects this and hiring top diverse talent for need to do better, but they need median pay of female employees commitment to women as a its summer analyst programs, to accelerate the progress they’re at Citi worldwide is 71 per cent business advantage with a lead- and scholarship programs for making,” Ms. Sutton says. the median pay of men. ership team that is nearly 40 per diverse candidates. She says more leaders must These results point to a need cent women.” These actions aren’t just the make diversity and inclusion a for more women in senior On a more local level, Ms. Di right thing to do but tie directly business priority, and it needs to roles, the company says. Citi Scola and her team are focused into Citi’s mission to innovate start with the CEO. “There has set targets in 2018 to raise the on working with leading uni- and deliver results for its clients, to be a clear, public commitment percentage of women in man- versities to attract women and Ms. Di Scola says. “We strive to gender diversity … and hold- agement roles globally to 40 per other diverse talent to work at to reflect the communities in ing everyone accountable,” Ms. cent by 2021 from 37 per cent. the organization upon gradu- which we work and believe that Sutton says. “You have to change The company’s top leaders will ation. to have the best talent and drive culture, processes and policies, be measured on their progress in “In order to change some of the best results, we need to be and that takes a lot of work.” meeting these targets. these structural issues, we need inclusive in all of our talent Ms. Di Scola believes the time “We have work to do, but we’re to make changes earlier in the practices. Diversity and inclu- to act is now. “It takes all of us on a path that I’m confident will process,” Ms. Di Scola says. She sion are key parts of our mission to create this kind of meaningful allow us to make meaningful points to the company’s ‘Day in to enable progress in the nearly impact. At Citi, we are pleased progress,” Sara Wechter, Citi’s the Citi’ program as an example. 100 countries where we oper- with our progress so far, but global head of human resources This all-female, on-site event ate,” she says. there is a lot more to do.”•

This content was produced by Globe Content Studio. The Globe’s editorial department was not involved in its creation. charts could provide a solid foundation for the national health platform. Personal records, though, are just a puddle next to the data ocean Khayat would like to see tapped next: genomics (the sequencing and analysis of the data in our genes), and the related pools of epigenomics (the study of inherited changes to genes) and microbiome data (genes in the microbes that live in our bodies). 68% Gathering and analyzing these data pools would each represent its own megaproject. And then there are the waves upon waves of data generated by wearable sensors like Fitbits and by tools such as blood-pressure Share of meters and digital thermometers. And Canadians who skip seeing there’s the constant data gathering a doctor due our miraculous pocket computers to long wait conduct, potentially providing times and information on where patients live, other barriers what they eat, the air quality of their neighbourhoods, and on and 38% on. “The narrow, narrow view of our $220-billion health system—14% of our GDP—is that the only pony in town is [conventional] health record data,” Khayat says. “And it’s just a joke, to be Portion of honest.” Ontario That joke could be on all of Canada, medical which is why the funding and political specialists capital of a megaproject would be so who still rely vital. “Canada is falling further and on paper records further behind” in health care, says ENERGY David Naylor, co-founder of the Ontario government’s Institute for Clinical Evaluative Sciences. “We need a Storing power for a national precision-medicine strategy.” That would include a massive genome- sequencing project—Canada does not 0 rainy (or windless) day have one at present, while the United Kingdom has plans in place, and China In an old salt cavern on the shore of Lake Huron, electricity waits to be will begin sequencing the genes of half the babies born in the country unleashed. The facility in Goderich, Ontario, draws excess energy from from 2020 onward. Canada would the grid during off-peak hours and sends it back during high-demand also need to implement a national- periods. The massive cavern could store up to 20 megawatts with the scale epidemiology study to provide existing power grid and more than double that if the area’s electricity baseline data on the diseases and infrastructure was expanded. For now, this is just a small-scale demon- 60 other illnesses most prevalent among stration of a technology that could transform how we use power—and Canadians. enhance our ability to get more of it from the wind and sun. That by itself would be a huge Short-term energy storage is already a growing business, most visibly endeavour, but a true intelligence- based medicine revolution requires represented by lithium-ion battery units such as Tesla’s Powerwall for much more. Governments at every 3, homes. But the real prize is in so-called “long-duration” storage: tech- level would need to co-ordinate data Number nologies that can stockpile grid-scale volumes of electricity for several gathering and sharing (and rewrite of known diseases hours or even days. By storing excess power generated when the wind the kinds of outdated regulations with genetic blows or the sun shines (as well as from other sources) and dispatch- that oblige the use of fax machines), culprits ing it over transmission lines to balance the grid when they don’t, these provincial governments would have solutions can reduce the need for new sources of fossil fuel–generated to unlock their black boxes of health records, and the federal government electricity—and, one day, help eliminate them entirely. In the process, would likely need to fast-track such projects would support the shift to clean power and a new energy approvals of new tools. industry in Canada while potentially lowering prices for ratepayers. It's a huge ask, but then the rewards Two Ontario firms are already players in this arena. NRStor and Hydro- would be megascale as well. “Entirely stor, partners on the Goderich test site, have proposed a 1,000-megawatt new products, services and businesses facility that would use compressed air to store energy at a decommis- could be created and then scaled sioned coal plant in Nanticoke, Ontario. Surplus energy drawn from the globally,” says Khayat. “And all that revenue, foreign investment and jobs transmission lines would feed a compressor that generates heated air, accrue to this country. And that’s which is then stored underground. When extra electricity is needed, really the promise—these multipliers that hot air would turn turbines that generate power to be dispatched to in the economy.” /C.T. the grid. With an estimated cost of $1.5 billion, the project would be by

4 MAY 2019 / GLOBE INVESTOR SPONSOR CONTENT CITI CANADA MARKS 100 YEARS OF ENABLING CLIENT SUCCESS Citigroup’s Canadian business celebrates a century-long commitment to driving sustainable growth for clients coast to coast

A LEADING GLOBAL BANK with approximately 200 million customer accounts across more than 160 countries and jurisdictions, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, ranging from consumer banking and credit, to corporate and investment banking, securities brokerage, transaction services, and wealth management. In the countries where it operates, Citi’s 200,000-plus employees have a shared purpose, the company says: to find solutions for each client’s unique needs. “Our mission is to enable economic growth and progress, as we have been doing since we opened our doors on Wall Street in 1812,” Citi Chief Executive Officer Michael Corbat says. “We come to work every day with a singular focus on delivering for our clients and for our shareholders.” Citi’s business model has evolved over its long history, Mr. Corbat says, based on the needs of the ever-changing marketplace. “For us, in these challenging times, it’s about making Citi’s Canadian roots date back to 1919. Toronto employees of First National sure that we’re able to serve and City Bank are pictured in front of what was then new City Hall in 1966. provide value to our clients,” he says. The company can trace its Canadian roots back to early 1919 for the Canadian government services professionals across within the communities where when the National City Com- after the war, to being the first Canada, with offices in Vancou- it operates. Through its Path- pany of Canada Ltd., National chartered bank in Canada to ver, Calgary, Montreal, Toronto ways to Progress initiative, the City Bank’s investment arm, offer computer-assisted financial and Mississauga that offer six company provides funding and first opened offices in Montreal analysis, to advising on major major lines of business including: volunteer resources to organiza- and then in Toronto to service infrastructure projects or helping Citi Corporate and Investment tions focused on assisting youth the needs of Canadian inves- to finance the global expansion of Banking, Citi Treasury and Trade employability, such as Youth tors. When World War I Veteran major Canadian clients, Citi has a Solutions, Citi Markets and Employment Services, Rise Asset Norman Mather was appointed local history of enabling progress. Securities Services, Citi Private Development and others. as district sales manager, his first “Our strategic focus in Canada Bank, Citi Cards Canada and “Our commitments to being the step was to issue a call for candi- is to continue to enable progress the company’s global technology best for our clients and to respon- dates to make up his bond selling and help our clients succeed,” development centre. sible finance, diversity, sustain- team, with one of the qualifica- says John Hastings, CEO of As with Citi’s operations in ability and exemplary citizenship tions being service records from Citibank Canada. other jurisdictions, in Canada are at the core of everything we the Great War. Citi Canada currently employs the company has also commit- do and have been for 100 years,” From supporting Victory Loans approximately 2,000 financial ted itself to enabling progress Mr. Hastings says.•

This content was produced by Globe Content Studio. The Globe’s editorial department was not involved in its creation. Waste heat would help grow food in greenhouses. The farm would serve as a hub in this new circu- lar economy. “We start with the geneticist and end with the urban planner,” Fraser says. Hence the need for a co-ordinated megaproject—the aim is not Rank among to corner one piece of this new the world’s exporters of food economy but to build out the agricultural entire system. Canada already has products by many competitive advantages: a dollar value sophisticated workforce, a strong CANADA education system, and the world’s largest stores of arable land and fresh water. The Netherlands has built its “Food Valley” cluster into a leading hub with more than 7,000 9 researchers. If a country with less land mass than New Brunswick NETHERLANDS could transform itself into the world’s No. 2 food exporter, think of the possibilities here. Still, Canada lags at present, with agricultural technology 2 investments in the tens of millions, even though global agribusiness venture capital has tripled since 2010 to $10 billion. Innova- Rank among tion is also stymied by regulatory the world’s exporters of hurdles that a megaproject’s scale manufactured and co-ordination could address. food products “If the climate data and the data by dollar value HEALTH that comes off your tractor aren’t CANADA owned and managed under a data- sharing arrangement [between jurisdictions], you won’t get the A national platform for insights from Big Data analytics,” Fraser explains. 11 precision medicine The first step, then, would be establishing a research hub When Zayna Khayat describes global-scale social and environmental somewhere like the University NETHERLANDS Canada’s health care system as information gathered by billions of of Guelph, within the booming “stuck in the 19th century,” she’s smartphone apps. Not only could this Toronto-Waterloo tech corridor, exaggerating less than you might data-driven revolution lead to better, where experts in robotics and AI think. As a futures strategist at cheaper, faster health care—imagine Toronto-based SE Health, one of a doctor in your pocket and a few taps could lend their skills to the proj- 3 Canada’s largest home health care on an app in place of the tedious visit ect. Fraser estimates $500 million providers, she is intimately familiar to the doctor's office—but it could could build the facilities and pay with the system’s limitations: the slow, also create a platform for an entire for the researchers to kick-start linear, “evidence-based medicine” new technology industry in Canada. the Big Data phase, with double of doctor visits, handwritten charts, The prospect is not that futuristic. that rolling in from venture capi- and clinical trials that take a decade Telus, for example, recently became talists and an array of “spokes” or more to bring new drugs and the exclusive Canadian distributor conducting specialized research procedures into practice. The limited of an app called Babylon Health. data sets that result wind up locked Developed by Britain’s National Health in regional crops—grains on in the black box of personal health Service, it’s a first step toward that the Prairies, say, and viticulture records. Khayat likes to point out that pocket doctor Khayat envisions, in British Columbia. Within a Ontario law still requires these records combining artificial intelligence to decade, Canada could be a major to be transmitted electronically only conduct initial evaluations with a team player. And, as Fraser notes, there by fax machine. of physicians ready to jump on a text are few projects more urgent. “It’s Canada needs a national effort or video call. one of the great challenges facing to usher in “intelligence-based Canada is better positioned than medicine,” Khayat argues: an entirely most countries to dominate this field the world: producing food in a way new health care system that harnesses because its universal health care that manages climate change and a vast ocean of available data— system has created a uniquely deep doesn’t undermine the ecosystems from the sequencing of Canadians’ pool of “womb to tomb” health care we depend on for life.” /Chris Turner individual genomes all the way to data to build on. All those doctors’

2 MAY 2019 / GLOBE INVESTOR Canada —and an economy— with soil, seeds and fertilizer engi- built in large measure on neered for each field. Digital imag- is a megaprojects. The national ing would provide farmers with railways, considered wild risks information about the soil and cli- at the time, first stitched the mate at microscale, while geneti- country’s disparate pieces cally engineered “designer agri- nation together. The St. Lawrence culture” would rely on Big Data to calibrate soil, water and nutrients. Seaway and the Trans-Canada Highway, the hydroelectric megaliths of Seeds could be developed to resist James Bay and the mammoth oil sands of northern Alberta were all critical drought conditions, livestock bred projects in establishing Canada’s later prosperity. to emit less methane. Now, as market forces change dramatically—from how energy is made Satellite-guided autonomous to the ways cities grow to how goods and services move between them— tractors—already a reality on Canada is thinking big again. In 2016, Ottawa committed to investing $180 some farms—would then work billion in infrastructure, including urban transit, green technology and with artificial intelligence soft- transportation networks. Our emerging expertise in artificial intelligence, ware and robotics to tend and harvest the crops. Farm work meanwhile, has attracted more than $350 million in government would become sensor-based and investments since 2016, helping launch nearly 200 startups. hands-free, more about data at But we want to look beyond the current concerns to the dynamics the the farmer’s fingertips than soil next generation will face. Which big bets and transformative technologies underneath the fingernails. should draw billions in public and private investment, and what impact One of the project’s goals is to might they have? In short, what megaprojects does Canada need next? return the land that agriculture We took this question to business leaders, think tank denizens, gobbles up to nature—or to fast- entrepreneurs, investors and other experts. We asked them to imagine growing cities. With intensified Canada’s needs at mid-century and beyond. Here are their best ideas. yields and the emergence of verti- cal farming (think of greenhouses ILLUSTRATIONS BY ANDRÁS BARANYAI stacked like downtown condos), side. “More food on less land with farms would get smaller, opening AGRICULTURE fewer inputs is the goal,” he says. up the opportunity for conserva- The technologies of the 20th- tion in some places and urban century “green revolution”—fer- development in others. Ceres Next-generation tilizer, pesticide, irrigation and would also co-ordinate food pro- hybridized seeds—triggered huge duction goals with urban plan- farm: smart, boosts in yields but also encour- ning. A city’s organic waste would aged homogeneous monocrop- enrich farm soil and grow insects compact, urban ping. The Ceres Project would for use as feed on fish farms; the instead treat the farm as a patch- fish waste would deliver more Whenyouthinkof afarm,what comes work of hyperlocal conditions, nutrients to surrounding farms. to mind? A barn, perhaps, and a clapboard house. A tractor or combine. But what about robotics? Do you think of designer genes or Yield improvements sustainable urban design? Likely in the not. But a generation from now, if Netherlands Evan Fraser gets his way, this will (tonnes per hectare) be the stuff of Canadian farming. Fraser, Canada Research Chair APPLES in global food security at the University of Guelph, calls his vision the Ceres Project, after the 1950: 6 Roman goddess of agriculture. It’s 2015: 44 intended to claim Canada’s right- ful position at the forefront of 21st- century food production. “We still SUGAR see farming as quaint and rural,” BEETS Fraser says. “We don’t see it as a high-tech engine of job creation.” Ceres would change that in a hurry. Fraser envisions the farm as a precision-engineered, cutting- edge operation as likely to sit at 1950: 41 the edge of a city as in the country- 2015: 84 IN CANADA, OUR HISTORY OF ENABLING PROGRESS DATES BACK A CENTURY.

We use our global scale and expertise to offer Canadians and multinational clients alike unrivaled access, empowering them with the ability to adapt and compete in a rapidly changing global economy. As one of the country’s largest foreign financial institutions, our legacy is one of innovation and exemplary citizenship. Precision health care A smart highway for The urban retrofit, glfor the 21st centuroby autonomous treucks from streets to sewers investor Megaprojects for the next generation Five billion-dollarbetsthatcouldtransformCanada’s economy